Thursday, 25 February 2021 | The Latest Buzz for the Appraisal Industry

Volume of Mortgages in Forbearance Decreases for Third Straight Week

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey reveals that as of February 14, the total number of loans in forbearance had decreased by 7 basis points – from 5.29% of servicers’ portfolio volume to 5.22% – from the week prior.

According to the MBA’s estimate, 2.6 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.97% – a 4-basis-point improvement. Ginnie Mae loans in forbearance decreased 2 basis points to 7.32%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 20 basis points to 8.94%.

The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 15 basis points to 5.54%, and the percentage of loans in forbearance for depository servicers increased 2 basis points to 5.28%.

“The share of loans in forbearance has declined for three weeks in a row, with portfolio and PLS loans decreasing the most this week,” says Mike Fratantoni, the MBA’s senior vice president and chief economist. “This decline was due to a sharp increase in borrower exits, particularly for IMB servicers.

“The housing market is quite strong, with home sales, home construction and home price data all testifying to this strength,” he adds. “Policymakers and the mortgage industry have helped enable this during the pandemic by providing millions of homeowners support in the form of forbearance. The decision to extend the allowable duration of forbearance plans should provide for a smoother transition this year as the job market continues to recover.”

By stage, 15.9% of total loans in forbearance are in the initial forbearance plan stage, while 81.6% are in a forbearance extension. The remaining 2.5% are forbearance re-entries.

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