Mortgage Loans in Forbearance Decline for the Tenth Week in a Row

The Mortgage Bankers Association (MBA) is reporting the results of their latest Forbearance and Call Volume Survey for the week ending August 16th. The total number of loans now in forbearance decreased by 1 basis point from 7.21% of servicers’ portfolio volume in the prior week to 7.20%. According to MBA’s estimate, 3.6 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance also dropped by only 1 basis point to 4.93%. Ginnie Mae loans in forbearance were flat at 9.54%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 3 basis points to 10.37%. The percentage of loans in forbearance for depository servicers dropped 1 basis point to 7.48%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers increased 1 basis point to 7.43%. In prepared remarks, Mike Fratantoni, MBA’s Senior Vice President and Chief Economist said, “The share of loans in forbearance declined for the tenth week in a row, but the rate of improvement has slowed markedly. The extremely high rate of initial claims for unemployment insurance and high level of unemployment remain a concern and are indications of the challenges many households are facing. While new forbearance requests remain low, particularly for Fannie Mae and Freddie Mac loans, the pace of exits from forbearance has declined for two straight weeks.”