The share of mortgages in COVID-19-related forbearance plans decreased to 5.29% of all loans during the week ended Feb. 7, as new requests for forbearance under the CARES Act – the provisions of which have now been extended to June 30 for government loans – trickled in, according to the Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey.
That’s down from 5.35% of servicers’ portfolio volume in the prior week.
Roughly 2.6 million homeowners are now in forbearance plans, according to the MBA’s estimates.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 3.01% – a six-basis-point improvement.
Last week, the Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac, announced that the companies would be extending the period for requesting forbearance plans through March 31.
Ginnie Mae loans in forbearance decreased 12 basis points to 7.34%, while the forbearance share for portfolio loans and private-label securities (PLS) remained unchanged relative to the prior week at 9.14%.
The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased four basis points to 5.69%, and the percentage of loans in forbearance for depository servicers decreased 10 basis points to 5.26%.
“The share of loans in forbearance declined to the lowest level since April 5 of last year, due to decreases in both the GSE and Ginnie Mae portfolios,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “Similar to the trend in recent months, the first week of February showed a faster pace of exits from forbearance compared to recent weeks, while new forbearance requests were unchanged.”
Fratantoni says he expects “the rollout of the vaccines to boost economic growth through the course of the year, leading to a stronger job market and a greater ability for more struggling homeowners to get back on their feet.”
“We do believe that additional support is needed until they have regained their jobs and incomes,” he adds.
Although the share of mortgages in forbearance increased slightly in late January it has fallen almost every week so far this year.
The post Share of Mortgages in Forbearance Continues to Fall appeared first on MortgageOrb.