Shares of Mortgage Loans in Forbearance Decline Further in October

According to the Mortgage Bankers Association’s (MBA) new monthly Loan Monitoring Survey released on Tuesday (11-21-23), the total number of loans in forbearance as of October 31st decreased 2 basis points to 0.29% of servicers’ portfolio volume—down from 0.31% in September.

An estimated 145,000 homeowners remain in forbearance plans. The MBA notes that mortgage servicers have provided forbearance to approximately 8.0 million borrowers since March 2020.

In October, the share of Fannie Mae and Freddie Mac loans in forbearance remained flat at 0.18%; Ginnie Mae loans in forbearance decreased by 5 basis points to 0.52%; and the forbearance share for portfolio loans and private-label securities (PLS) declined 3 basis points to 0.32%.

In remarks prepared to accompany the report, MBA Vice President of Industry Analysis Marina Walsh said:

“For the first time since MBA began tracking the reasons for forbearance in October 2022, temporary hardships such as job loss, death, and divorce represent a larger share of loans in forbearance by reason than a COVID-19 hardship. This upward trend will continue, as Fannie Mae and Freddie Mac sunset the use of COVID-19 as a reason for delinquency starting in November 2023, and FHA’s COVID-19 forbearance period ends at the end of November 2023.

Forbearance is still an option for many distressed homeowners, but in most cases, the requirements to obtain a forbearance will not be as streamlined as they were during the pandemic.”