Share of Mortgage Loans in Forbearance Decreases to 3.08 Percent
WASHINGTON, D.C. (September 13, 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 15 basis points from 3.23% of servicers' portfolio volume in the prior week to 3.08% as of September 5, 2021. According to MBA's estimate, 1.5 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 11 basis points to 1.52%. Ginnie Mae loans in forbearance decreased 24 basis points to 3.39%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased 25 basis points to 7.27%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 16 basis point to 3.33%, and the percentage of loans in forbearance for depository servicers decreased 18 basis points to 3.15%.
"The share of loans in forbearance decreased by 15 basis points last week, as forbearance exits jumped to their fastest pace since March. The fast pace of exits outweighed the slight increase in new forbearance requests and re-entries," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "Servicer call volume jumped last week as summer came to an end and many borrowers reached the end of their forbearance terms. We anticipate a similarly fast pace of exits in the weeks ahead, which should lead to increased call volume and a further decline in the forbearance share."
Key findings of MBA's Forbearance and Call Volume Survey - August 30 to September 5, 2021
- Total loans in forbearance decreased by 15 basis points relative to the prior week: from 3.23% to 3.08%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 3.63% to 3.39%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.63% to 1.52%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 7.52% to 7.27%.
- By stage, 10.7% of total loans in forbearance are in the initial forbearance plan stage, while 81.1% are in a forbearance extension. The remaining 8.2% are forbearance re-entries.
- Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.04% to 0.05%.
- Of the cumulative forbearance exits for the period from June 1, 2020, through September 5, 2021, at the time of forbearance exit:
- 28.3% resulted in a loan deferral/partial claim.
- 22.2% represented borrowers who continued to make their monthly payments during their forbearance period.
- 16.3% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 12.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 11.5% 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 increased relative to the prior week: from 5.8% to 7.7%.
- Average speed to answer increased from 1.0 minutes to 1.6 minutes.
- Abandonment rates increased from 3.3% to 4.0%.
- Average call length increased from 8.1 minutes to 8.2 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of September 5, 2021:
- Total: 3.08% (previous week: 3.23%)
- IMBs: 3.33% (previous week: 3.49%)
- Depositories: 3.15% (previous week: 3.33%)