December’s Monthly Forbearance Report Shows Steady Decline in Number of Homeowners Still in Plans

According to the new monthly Mortgage Bankers Association’s (MBA) Loan Monitoring Survey (LMS), the total number of loans now in forbearance decreased by 25 basis points from 1.67% of servicers’ portfolio volume in the prior month to 1.41% as of 31st December 2021. The MBA estimates that 705,000 homeowners remain in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 8 basis points to 0.68%. Ginnie Mae loans in forbearance decreased 47 basis points to 1.63%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 51 basis points to 3.43%.

In a statement prepared for the release of the December LMS, Marina Walsh, CMB, MBA’s Vice President of Industry Analysis said, “The share of loans in forbearance continued to decline in December 2021. This was especially the case for government and private-label and portfolio loans, as those loans have higher levels of forbearance than loans backed by Fannie Mae and Freddie Mac. With the number of borrowers in forbearance continuing to decrease below 750,000, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020.”

“It is likely that the remaining borrowers in forbearance have experienced either a permanent hardship that may require more complex loan workout solutions, or they have encountered a recent hardship for which they are now seeking relief,” Walsh added.