Share of Mortgage Loans in Forbearance Decreases to 3.25 Percent

CONTACT
Adam DeSanctis
adesanctis@mba.org
(202) 557-2727

WASHINGTON, D.C. (August 23, 2021) - The Mortgage Bankers Association's (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 1 basis point from 3.26% of servicers' portfolio volume in the prior week to 3.25% as of August 15, 2021. According to MBA's estimate, 1.6 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 1.66%. Ginnie Mae loans in forbearance decreased 3 basis points to 3.92%, while the forbearance share for portfolio loans and private-label securities (PLS) increased 10 basis points to 7.15%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers increased 2 basis points to 3.48%, and the percentage of loans in forbearance for depository servicers decreased 1 basis point to 3.35%.  

"The share of loans in forbearance was little changed, as both new requests and exits were at a slower pace compared to the prior week. In fact, exits were at their slowest pace in over a year," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "There were more new forbearance requests and re-entries for portfolio and PLS loans, leading to a 10-basis-point increase in their share. Portfolio and PLS loans now account for almost 50% of all depository servicer loans in forbearance and almost 40% of IMB servicer loans in forbearance, which highlights the importance of this investor category."  

Key findings of MBA's Forbearance and Call Volume Survey - August 9 to August 15, 2021

  • Total loans in forbearance decreased by 1 basis point relative to the prior week: from 3.26% to 3.25%.
    • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 3.95% to 3.92%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.69% to 1.66%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 7.05% to 7.15%.
  • By stage, 10.0% of total loans in forbearance are in the initial forbearance plan stage, while 82.3% are in a forbearance extension. The remaining 7.7% are forbearance re-entries.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.06% to 0.05%.
  • Of the cumulative forbearance exits for the period from June 1, 2020, through August 15, 2021, at the time of forbearance exit:
    • 28.3% resulted in a loan deferral/partial claim.
    • 22.6% represented borrowers who continued to make their monthly payments during their forbearance period.
    • 16.1% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
    • 13.1% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
    • 11.1% resulted in a loan modification or trial loan modification.
    • 7.4% resulted in loans paid off through either a refinance or by selling the home.
    • The remaining 1.4% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls decreased relative to the prior week: from 7.5% to 7.3%.
    • Average speed to answer remained the same at 1.5 minutes.
    • Abandonment rates decreased from 5.0% to 4.6%.
    • Average call length increased from 7.5 minutes to 7.9 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of August 15, 2021:
    • Total: 3.25% (previous week: 3.26%)
    • IMBs: 3.48% (previous week: 3.46%)
    • Depositories: 3.35% (previous week: 3.36%)

MBA's latest Forbearance and Call Volume Survey covers the period from August 9 through August 15, 2021 and represents 74% of the first-mortgage servicing market (36.9 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 fbsurvey@mba.org.