Share of Mortgage Loans in Forbearance Increases for Fifth Consecutive Month in October

According to the Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey (LMS) released on Monday, the total number of loans in forbearance as of October 31st increased to 0.47% of servicers’ portfolio volume, up from 0.34% in September.

MBA estimates that 235,000 homeowners are in forbearance plans, and mortgage servicers have provided forbearance to approximately 8.4 million borrowers since March 2020.

In October, the share of Fannie Mae and Freddie Mac loans in forbearance increased 7 basis points to 0.20%; Ginnie Mae loans in forbearance increased by 30 basis points to 1.06%; and the forbearance share for portfolio loans and private-label securities (PLS) increased 6 basis points to 0.43%.

Adding background and analysis to the survey results, MBA Vice President of Industry Analysis Marina Walsh said:

“Approximately 65,000 more borrowers are in forbearance compared to one month ago. While forbearances are still low compared to the height of the pandemic, the monthly increase in forbearances is the largest since May 2020 and likely driven by the effects of Hurricanes Helene and Milton.

Of those loans in forbearance, 45% are related to natural disasters while the remaining 55% are primarily related to temporary hardship such as job loss, death, divorce, or disability. Notwithstanding the storms, some borrowers may be experiencing other economic distress. October marks the fifth consecutive month in which the forbearance rate has increased, and the performance of overall servicing portfolios and loan workouts weakened compared to this time one year ago.”