Share of Mortgage Loans in Forbearance Decreases to 2.89 Percent
WASHINGTON, D.C. (October 4, 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 7 basis points from 2.96% of servicers' portfolio volume in the prior week to 2.89% as of September 26, 2021. According to MBA's estimate, 1.4 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 6 basis points to 1.38%. Ginnie Mae loans in forbearance decreased 7 basis points to 3.35%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 14 basis points to 6.77%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 5 basis points relative to the prior week to 3.19%, and the percentage of loans in forbearance for depository servicers decreased 13 basis points to 2.93%.
"The share of loans in forbearance declined at a faster rate last week, dropping by 7 basis points, as exits increased and new requests and re-entries declined," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "While 1.4 million homeowners remained in forbearance as of September 26th, this number is expected to drop sharply over the next few weeks as many are reaching the 18-month expiration point of their forbearance terms. Most borrowers exiting forbearance through a workout are opting for a deferral plan, which allows them to resume their original payment, while moving the forborne amount to the end of the loan."
Added Fratantoni, "Although call volume dropped in the last week of September, we expect that servicers will be very busy through October.
Key findings of MBA's Forbearance and Call Volume Survey - September 20 to September 26, 2021
- Total loans in forbearance decreased by 7 basis points relative to the prior week: from 2.96% to 2.89%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 3.42% to 3.35%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.44% to 1.38%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 6.91% to 6.77%.
- By stage, 12.4% of total loans in forbearance are in the initial forbearance plan stage, while 78.7% are in a forbearance extension. The remaining 8.9% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.05% to 0.04%.
- Of the cumulative forbearance exits for the period from June 1, 2020, through September 26, 2021, at the time of forbearance exit:
- 28.9% resulted in a loan deferral/partial claim.
- 21.7% 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.
- 12.5% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 12.0% 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 7.9% to 5.9%.
- Average speed to answer decreased from 1.7 minutes to 1.5 minutes.
- Abandonment rates decreased from 4.5% to 4.2%.
- Average call length remained the same relative to the prior week at 8.2 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of September 26, 2021:
- Total: 2.89% (previous week: 2.96%)
- IMBs: 3.19% (previous week: 3.24%)
- Depositories: 2.93% (previous week: 3.06%)