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MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 2.28%"


by Calculated Risk on 10/18/2021 04:00:00 PM

Note: This is as of October 10th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 2.28%

The Mortgage Bankers Association’s (MBA) latest
Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance
decreased by 34 basis points from 2.62% of servicers’ portfolio volume in the prior week to 2.28% as of
October 10, 2021. According to MBA’s estimate, 1.1 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 16 basis points to 1.05%.
Ginnie Mae loans in forbearance decreased 17 basis points to 2.77%, and the forbearance share for
portfolio loans and private-label securities (PLS) declined 108 basis points to 5.34%. The percentage of
loans in forbearance for independent mortgage bank (IMB) servicers decreased 25 basis points relative
to the prior week to 2.57%, and the percentage of loans in forbearance for depository servicers
decreased 53 basis points to 2.16%.

“Forbearance exits continued at an even more robust pace, resulting in a 34 basis-point decline in the
overall forbearance rate. The decline was apparent across all servicer types and investor types,” said
Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “There was a substantial drop of
over 1 percentage point in the forbearance rate for portfolio and PLS loans, which includes loans held
for investment purposes, loans serviced for private investors, and government loans that were bought
out of Ginnie Mae pools for the purposes of modifying them and then re-securitizing them into Ginnie
Mae pools.”

Added Fratantoni, “We are now down to 1.1 million homeowners in forbearance from a peak of 4.3
million homeowners in June 2020. Positive employment and wage prospects, continued home-price
appreciation, and the availability of multiple loan workout options are factors that will smooth many
homeowners’ transition out of forbearance.”

emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time. Most of the increase was in late March and early April 2020, and has trended down since then.

The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.05% to 0.04%.”

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