Mortgage Loans in Forbearance Decrease for Sixth Week in a Row

The Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey for the week ending July 19th, is reporting that the total number of loans in forbearance declined by 6 basis points from 7.80% of servicers’ portfolio volume in the prior week to 7.74%. According to MBA’s estimate, 3.9 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the seventh week in a row to 5.49% – 15-basis-point improvement. Ginnie Mae loans in forbearance increased by 1 basis point to 10.27%, and the forbearance share for portfolio loans and private-label securities (PLS) increased by 12 basis points to 10.53%. The percentage of loans in forbearance for depository servicers dropped to 8.06%, while the percentage of loans in forbearance for independent mortgage bank (IMB) servicers rose to 7.85%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist, in prepared remarks said, “The share of loans in forbearance declined by a smaller amount than in previous weeks, as the pace of borrowers exiting forbearance slowed. The high level of unemployment claims in recent weeks may be playing a role, as weakness would likely impact Ginnie Mae’s portfolio first.”