Mortgage Loans in Forbearance Decreases for Ninth Week in a Row

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey reports that that the total number of loans now in forbearance decreased by 23 basis points from 7.44% of servicers’ portfolio volume in the prior week to 7.21% as of August 9, 2020. According to MBA’s estimate, 3.6 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 10th week in a row to 4.94% – a 25-basis-point improvement. Ginnie Mae loans in forbearance decreased by 52 basis points to 9.54%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 22 basis points to 10.34%. The percentage of loans in forbearance for depository servicers dropped to 7.49%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 7.42%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist said in prepared remarks that “More homeowners exited forbearance last week, leading to the ninth straight drop in the share of loans in forbearance. However, the decline in Ginnie Mae loans in forbearance was again because of buyouts of delinquent loans from Ginnie Mae pools, which result in these FHA and VA loans being reported in the portfolio category. A sign that more FHA and VA borrowers are struggling with a very tough job market, more Ginnie Mae borrowers requested than exited forbearance.”