The latest Mortgage Banker Association’s (MBA) Forbearance and Call Survey reports that the total number of loans now in forbearance decreased by 27 basis points from 2.89% of servicers’ portfolio volume in the prior week to 2.62% as of October 3, 2021. According to MBA’s estimate, 1.3 million homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 17 basis points to 1.21%. Ginnie Mae loans in forbearance decreased 41 basis points to 2.94%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 35 basis points to 6.42%.
The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 37 basis points relative to the prior week to 2.82%, and the percentage of loans in forbearance for depository servicers decreased 24 basis points to 2.69%.
In remarks prepared for the release of this week’s forbearance survey, Mike Fratantoni, MBA’s Senior Vice President and Chief Economist said, “Many borrowers reached the expiration of their forbearance term as we entered October. The pace of exits climbed to the fastest pace in over a year, and the share of loans in forbearance declined at the fastest rate since last October, dropping by 27 basis points. The decline was the largest for Ginnie Mae and portfolio/PLS loans. Payment performance has remained steady for those who have exited forbearance into a workout since 2020, with more than 85% of those borrowers current as of October. It also continues to be striking that so many homeowners in forbearance have continued to make their payments. Almost 16 percent of borrowers in forbearance as of October 3rd were current.”
Fratantoni went onto say, “Job growth was weaker than expected in September, reflecting the challenges from the Delta variant, ongoing supply chain issues, and the resulting slowdowns in workplace and school re-openings. However, the drop in the unemployment rate, rising wages, and abundant job openings will continue to help support the housing market, including helping borrowers exit forbearance successfully in the weeks ahead.”
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Share of Mortgage Loans in Forbearance Decreases to 2.62 Percent