Shares of Mortgage Loans in Forbearance Declined Further in April

According to the new monthly Mortgage Bankers Association’s (MBA) Loan Monitoring Survey (LMS), the total number of loans now in forbearance decreased 4 basis points from 0.55% of servicers’ portfolio volume in March to 0.51% as of April 30th. The MBA estimates that 255,000 homeowners remain in forbearance plans. The MBA notes that mortgage servicers have provided forbearance to approximately 7.8 million borrowers since April 2020.

In April, the share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.24%. Ginnie Mae loans in forbearance decreased by 7 basis point to 1.11%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 7 basis points to 0.61%.

Providing additional background and analysis of the April forbearance report, Marina Walsh, MBA’s Vice President of Industry Analysis, said:

“While the number of loans in forbearance continues to dwindle, there was some deterioration in the performance of the post-forbearance workouts. About three out of four borrowers are remaining current on their post forbearance workouts, but this down from the average of four out of five that was relatively consistent in 2022 and into 2023.

Overall servicing portfolios remain healthy, and some of the worsening monthly performance can be attributed to seasonal factors such as tax refunds that pushed up the March results and then normalized in April. MBA’s forecast calls for an economic slowdown and increase in unemployment later this year and into 2024, which will impact loan performance.”