Mortgage Loans in Forbearance Decreases for 14th Week in a Row

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 15 basis points from 7.16% of servicers’ portfolio volume in the prior week to 7.01% as of September 6, 2020. According to MBA’s estimate, 3.5 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 14th week in a row to 4.65% – a 15-basis-point improvement. Ginnie Mae loans in forbearance decreased 50 basis points to 9.12%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 28 basis points to 10.71%. The percentage of loans in forbearance for depository servicers decreased 19 basis points to 7.21%, while the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 8 basis points to 7.33%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist said in prepared remarks that “The beginning of September brought another drop in the share of loans in forbearance, with declines in both GSE and Ginnie Mae forbearance shares. However, at least a portion of the decline in the Ginnie Mae share was due to servicers buying delinquent loans out of pools and placing them on their portfolios. As a result of this transfer, the share of portfolio loans in forbearance increased. Forbearance requests increased over the week, particularly for Ginnie Mae loans. With just under 1 million unemployment insurance claims still being filed every week, the lack of additional fiscal support for the unemployed could lead to even higher increases of those needing forbearance.”