Share of Mortgage Loans in Forbearance Decreases to 0.69% in September
The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 3 basis points from 0.72% of servicers’ portfolio volume in the prior month to 0.69% as of September 30, 2022. According to MBA’s estimate, 345,000 homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.30%. Ginnie Mae loans in forbearance increased 1 basis point to 1.33%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 12 basis points to 1.14%.
“The overall number of loans in forbearance dropped in September, but the pace of forbearance exits slowed to a new survey-low and new forbearance requests continued to come in. This dynamic in turn prevented any substantial improvement in the forbearance rate,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The COVID-19 federal health emergency is still in effect and in most cases, borrowers can still seek initial COVID-19 hardship forbearance."
Added Walsh, “In the near-term, the number of loans in forbearance will likely increase for another reason – the recent devastation caused by Hurricane Ian in Florida, South Carolina, and other states. MBA’s Loan Monitoring Survey requests that servicers report all loans in forbearance regardless of the borrower’s stated reason – whether pandemic-related, due to a natural disaster, or another cause.”
Key Findings of MBA's Loan Monitoring Survey – September 1 to September 30, 2022
- Total loans in forbearance decreased by 3 basis points in September 2022 relative to August 2022: from 0.72% to 0.69%.
- By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior month: from 1.32% to 1.33%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior month: from 0.32% to 0.30%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior month: from 1.26% to 1.14%.
- Loans in forbearance as a share of servicing portfolio volume (#) as of September 30, 2022:
- Total: 0.69% (previous month: 0.72%)
- Independent Mortgage Banks (IMBs): 0.95% (previous month: 0.96%)
- Depositories: 0.48% (previous month: 0.52%)
- By stage, 33.7% of total loans in forbearance are in the initial forbearance plan stage, while 53.2% are in a forbearance extension. The remaining 13.1% are forbearance re-entries, including re-entries with extensions.
- Of the cumulative forbearance exits for the period from June 1, 2020, through September 30, 2022, at the time of forbearance exit:
- 29.6% resulted in a loan deferral/partial claim.
- 18.3% represented borrowers who continued to make their monthly payments during their forbearance period.
- 17.3% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 16.0% resulted in a loan modification or trial loan modification.
- 11.0% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 6.6% resulted in loans paid off through either a refinance or by selling the home.
- The remaining 1.2% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
- Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume (#) decreased to 95.83% in September 2022 from 95.85% in August 2022 (on a non-seasonally adjusted basis).
- The five states with the highest share of loans that were current as a percent of servicing portfolio: Idaho, Washington, Colorado, Utah, and Oregon.
- The five states with the lowest share of loans that were current as a percent of servicing portfolio: Mississippi, Louisiana, New York, West Virginia, and Indiana.
- Total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/partial claims, loan modifications) that were current as a percent of total completed workouts increased to 78.70% last month from 78.31% in August.
MBA’s monthly Loan Monitoring Survey (replaced MBA’s Weekly Forbearance and Call Volume Survey in November 2021) covers the period from September 1 through September 30, 2022, and represents 65% of the first-mortgage servicing market (32.7 million loans). To subscribe to the full report, go to www.mba.org/loanmonitoring.
NOTES: For more detailed information on performance metrics, including seasonally adjusted delinquency rates by stage (30 days, 60 days, 90+ days), please refer to MBA’s Quarterly National Delinquency Survey at www.mba.org/nds. Second-quarter 2022 results were released on August 11, 2022 and third-quarter results are scheduled to be released on Thursday, November 10, 2022.
The next publication of the Monthly Loan Monitoring Survey (LMS) will be released on Monday, November 21, 2022, at 4:00 p.m. ET.
For more information on COVID-19 mortgage forbearance and eligibility, please click here.