Share of Mortgage Loans in Forbearance Declines to 6.81%
WASHINGTON, D.C. (October 5, 2020) - The Mortgage Bankers Association's (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 6 basis points from 6.87% of servicers' portfolio volume in the prior week to 6.81% as of September 27, 2020. According to MBA's estimate, 3.4 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 17th week in a row to 4.39% - a 7-basis-point improvement. Ginnie Mae loans in forbearance increased 1 basis point to 9.16%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 13 basis points to 10.39%. The percentage of loans in forbearance for depository servicers decreased 8 basis points to 7.03%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 4 basis points to 7.19%.
"As of the end of September, there continues to be a slow and steady decrease in the share of loans in forbearance - driven by consistent declines in the GSE loan share - and a persistently high amount in the Ginnie Mae portfolio," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "The significant churn in the labor market now, more than six months into the pandemic, is still causing financial distress for millions of homeowners. As a result, more than 70 percent of loans in forbearance are now in an extension."
Key findings of MBA's Forbearance and Call Volume Survey - September 21 to September 27, 2020
- Total loans in forbearance decreased by 6 basis points relative to the prior week: from 6.87% to 6.81%.
- By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 9.15% to 9.16%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.46% to 4.39%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 10.52% to 10.39%.
- By stage, 28.50% of total loans in forbearance are in the initial forbearance plan stage, while 70.07% are in a forbearance extension. The remaining 1.43% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.11% to 0.08%.
- Weekly servicer call center volume:
- As a percent of servicing portfolio volume (#), calls decreased from 8.3% to 6.8%.
- Average speed to answer decreased from 3.0 minutes to 2.3 minutes.
- Abandonment rates decreased from 6.9% to 5.3%.
- Average call length decreased from 7.8 minutes to 7.6 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of September 27, 2020:
- Total: 6.81% (previous week: 6.87%)
- IMBs: 7.19% (previous week: 7.23%)
- Depositories: 7.03% (previous week: 7.11%)
MBA's latest Forbearance and Call Volume Survey covers the period from September 21 through September 27, 2020, and represents 74% of the first-mortgage servicing market (37.1 million loans). To subscribe to the full report, go to www.mba.org/fbsurvey. If you are a mortgage servicer interested in participating in the survey, email email@example.com.