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MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 2.21%"

by Calculated Risk on 10/25/2021 04:00:00 PM

Note: This is as of October 17th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 2.21%

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.”
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time. The number of forbearance plans is decreasing rapidly recently since many homeowners have reached the end of the 18-month term.

The MBA notes: “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.”

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