Mortgage Loans in Forbearance Decrease for Seventh Week in a Row

The Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey for July 26th, reports that the total number of loans now in forbearance decreased by 7 basis points from 7.74% of servicers’ portfolio volume in the prior week to 7.67% as of July 26th, 2020. According to MBA’s estimate, 3.8 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the eighth week in a row to 5.41% – an 8-basis-point improvement. Ginnie Mae loans in forbearance increased by 1 basis point to 10.28%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased by 16 basis points to 10.37%. The percentage of loans in forbearance for depository servicers dropped to 7.95%, while the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 7.81%. In prepared remarks Mike Fratantoni, MBA’s Senior Vice President and Chief Economist said, “The share of loans in forbearance declined, but we are now seeing a notable pattern developing over the past two weeks. The forbearance share is decreasing for GSE loans but has slightly increased for Ginnie Mae loans. The job market has cooled somewhat over the past few weeks, with layoffs increasing and other indications that the economic rebound may be losing some steam because of the rising COVID-19 cases throughout the country. It is therefore not surprising to see this situation first impact the Ginnie Mae segment of the market.”