Shares of Mortgage Loans in Forbearance Continued to Decline in June

According to the new monthly Mortgage Bankers Association’s (MBA) Loan Monitoring Survey released on Tuesday (7-17-23), the total number of loans in forbearance as of June 30th decreased 5 basis points to 0.44% of servicers’ portfolio volume. The MBA estimates that 220,000 homeowners remain in forbearance plans. The MBA notes that mortgage servicers’ have provided forbearance to approximately 7.9 million borrowers since March 2020.

In June, the share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.21%. Ginnie Mae loans in forbearance decreased by 13 basis point to 0.93%. The forbearance share for portfolio loans and private-label securities (PLS) declined 6 basis points to 0.52%.

Commenting on the June forbearance report, Marina Walsh, CMB, MBA’s Vice President of Industry Analysis, said:

“Mortgage forbearance has declined because most homeowners have maintained or improved their financial health. Recent reporting by the US Bureau of Labor Statistics shows continued job growth in June, and a 3.6 percent unemployment rate. The employment situation tracks with homeowners’ ability to make mortgage payments.

MBA forecasts a slowing in the economy that could give rise to higher unemployment and mortgage delinquencies later in the year. Forbearance remains a viable loss mitigation option for homeowners who may struggle under more challenging economic conditions.”