Number of US Mortgage Loans in Forbearance Declines in December

On Tuesday, the Mortgage Bankers Association (MBA) released its monthly Loan Monitoring Survey for December. As of December 31, the total number of loans in forbearance declined from 0.50% of servicers’ portfolio volume in November to 0.47%.

An estimated 235,000 homeowners are now in forbearance plans. Since March 2020, approximately 8.5 million borrowers have been provided forbearance, MBA reported.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.19% in December; Ginnie Mae loans in forbearance decreased by 4 basis points to 1.07%; and the forbearance share for portfolio loans and private-label securities (PLS) decreased 2 basis points to 0.40%.

In remarks accompanying the report, MBA Vice President of Industry Analysis Marina Walsh said:

“The overall mortgage forbearance rate decreased slightly in December as some borrowers got back on track following last fall’s severe weather in the Southeast. Even with the slight decrease, the level of forbearance is higher than it was six months ago across all loan types and the performance of servicing portfolios and loan workouts has weakened.

At year end, almost 43% of borrowers in forbearance were there due to a natural disaster. Given the disruption and devastation caused by the California wildfires, that share will likely move higher in the months ahead, as homeowners turn to forbearance to allow time to navigate their recovery process.”