Shares of Mortgage Loans in Forbearance Declined to 0.60% in February

According to the new monthly Mortgage Bankers Association (MBA) Loan Monitoring Survey (LMS), the total number of loans now in forbearance decreased 4 basis points from 0.64% of servicers’ portfolio volume in January to 0.60% as of February 28th. The MBA estimates that 300,000 homeowners remain in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.28%; Ginnie Mae loans in forbearance decreased by 9 basis point to 1.28%; and the forbearance share for portfolio loans and private-label securities (PLS) declined 5 basis points to 0.78%.

Providing additional background and insight into the February forbearance report, Marina Walsh, CMB, MBA’s Vice President of Industry Analysis, said:

“The forbearance rate decreased for both independent mortgage bank and depository servicers across all investor types in February. Even with the fewer days in the month—which often causes a drop in timely monthly payments—overall servicing portfolio performance declined only slightly to 95.8 percent, while performance of post-forbearance workouts stayed essentially flat at 76.0 percent.

The February results on mortgage performance is welcome news, given recent increases in delinquencies for other credit types such as credit cards and auto loans. However, with the possibility of a recession this year, we may see some deterioration in performance—particularly for government loans.”