Shares of Mortgage Loans in Forbearance Decline Further in January

According to the Mortgage Bankers Association’s (MBA) new monthly Loan Monitoring Survey released on Wednesday, the total number of loans in forbearance as of January 31st decreased by 1 basis point to 0.22% of servicers’ portfolio volume, down from 0.23% in December. The MBA estimates that 110,000 homeowners remain in forbearance plans. The MBA notes that mortgage servicers’ have provided forbearance to approximately 8.1 million borrowers since March 2020.

In January, the share of Fannie Mae and Freddie Mac loans in forbearance declined 2 basis points to 0.13%; Ginnie Mae loans in forbearance remained unchanged at 0.39%; and the forbearance share for portfolio loans and private-label securities (PLS) increased by 1 basis point to 0.28%.

Commenting on the results of the survey, MBA Vice President of Industry Analysis Marina Walsh said:

“The combination of a potential economic slowdown in 2024, and indications that consumer debt balances and delinquencies are on the rise, could lead to more homeowners struggling to make their mortgage payments and inquire about forbearance and available loan workout options. Most pandemic-related protocols have sunset, which gives mortgage servicers different rules of engagement when it comes to assisting borrowers through loan forbearance or a loan workout.”