Share of Mortgage Loans in Forbearance Decreases to 2.21 Percent

WASHINGTON, D.C. (October 25, 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 2.28% of servicers' portfolio volume in the prior week to 2.21% as of October 17, 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 5 basis points to 1.00%. Ginnie Mae loans in forbearance decreased 5 basis points to 2.72%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 13 basis points to 5.21%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 8 basis points relative to the prior week to 2.49%, and the percentage of loans in forbearance for depository servicers decreased 5 basis points to 2.11%.

"Following two weeks of rapid declines, the share of loans in forbearance dropped again, but at a reduced rate. As reported in the past, many servicers process forbearance exits at the beginning of the month, therefore it is not surprising to see the pace of exits slow again mid-month," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "The composition of loans in forbearance is evolving. More than 25% of loans in forbearance are now made up of new forbearance requests and re-entries, while many other homeowners who have reached the end of 18-month terms are successfully exiting into deferrals or modifications."

Key findings of MBA's Forbearance and Call Volume Survey - October 11 to October 17, 2021

• Total loans in forbearance decreased by 7 basis points relative to the prior week: from 2.28% to 2.21%.
  • By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior week: from 2.77% to 2.72%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.05% to 1.00%.
  • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 5.34% to 5.21%.
• By stage, 15.3% of total loans in forbearance are in the initial forbearance plan stage, while 74.8% are in a forbearance extension. The remaining 9.9% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.04%.
• Of the cumulative forbearance exits for the period from June 1, 2020, through October 17, 2021, at the time of forbearance exit:
  • 29.1% resulted in a loan deferral/partial claim.
  • 20.7% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 16.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
  • 13.0% resulted in a loan modification or trial loan modification.
  • 12.1% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
  • 7.1% resulted in loans paid off through either a refinance or by selling the home.
• The remaining 1.3% 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 7.4% to 7.7%.
  • Average speed to answer decreased from 2.6 minutes to 2.1 minutes.
  • Abandonment rates decreased from 6.0% to 5.7%.
• Average call length decreased from 8.3 minutes to 7.9 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of October 17, 2021:
  • Total: 2.21% (previous week: 2.28%)
  • IMBs: 2.49% (previous week: 2.57%)
  • Depositories: 2.11% (previous week: 2.16%)

MBA's latest Forbearance and Call Volume Survey covers the period from October 11 through October 17, 2021, and represents 73% of the first-mortgage servicing market (36.7 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 protected].