Shares of Mortgage Loans in Forbearance Decline to 1.30% as of January 31, 2022

According to the new monthly Mortgage Bankers Association’s (MBA) Loan Monitoring Survey (LMS), the total number of loans now in forbearance decreased by -11 basis points from 1.41% of servicers’ portfolio volume in the prior month to 1.30% as of January 31, 2022. The MBA estimates that 650,000 homeowners remain in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased -4 basis points to 0.68%. Ginnie Mae loans in forbearance decreased -3 basis points to 1.60%, and the forbearance share for portfolio loans and private-label securities (PLS) declined -41 basis points to 3.02%.

In a statement prepared for the release of the December LMS, Marina Walsh, CMB, MBA’s Vice President of Industry Analysis said, “For the second straight month, the pace of forbearance exits reached another low since MBA began tracking exits in June 2020. There was also a pick-up in new forbearance requests and re-entries for all loans, and particularly for Ginnie Mae loans. Even though the forbearance rate continued its downward trajectory, it was the smallest monthly decline since January 2021.”

“The positive news is that the percentage of borrowers who were current on their mortgage payments increased from December 2021,” Walsh added. “However, there was some deterioration in the performance of borrowers with existing loan workouts. Borrowers in loan workouts may have experienced new life events unrelated to the pandemic, or alternatively, the omicron variant may have triggered or re-triggered employment, health, or other stresses.”