Shares of Mortgage Loans in Forbearance Decline Further in November

According to the Mortgage Bankers Association’s (MBA) new monthly Loan Monitoring Survey (LMS) released on Tuesday (12-19-23), the total number of loans in forbearance as of November 30th decreased 3 basis points to 0.26% of servicers’ portfolio volume—down from 0.26% in October.

MBA estimates that 130,000 homeowners remain in forbearance plans. Mortgage servicers have provided forbearance to approximately 8.1 million borrowers since March 2020, MBA says.

In November, the share of Fannie Mae and Freddie Mac loans in forbearance declined 2 basis points to 0.16%; Ginnie Mae loans in forbearance decreased by 5 basis point to 0.47%; and the forbearance share for portfolio loans and private-label securities (PLS) declined 2 basis points to 0.30%.

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

“Nearly 96% of all home mortgages are performing, which underscores how strong servicing portfolio performance is right now with the same resilience seen in the US labor market. Meanwhile, the performance of loan workouts is solid, but declined last month. Roughly 70% of loan workouts initiated since 2020 are current.

MBA forecasts an economic downturn in 2024, and there are signs of early distress in other credit types such as car loans and credit cards. Those borrowers who struggled in making their mortgage payments in the past may find themselves in similar situations in a softening economy and rising unemployment.”