Shares of Mortgage Loans in Forbearance Edge Slightly Higher in October

According to the new monthly Mortgage Bankers Association (MBA) Loan Monitoring Survey (LMS), the total number of loans now in forbearance increased by 1 basis point, from 0.69% of servicers’ portfolio volume in the prior month to 0.70% as of October 31st. The MBA estimates that 350,000 homeowners are now in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance increased 1 basis point to 0.31%; Ginnie Mae loans in forbearance increased by 8 basis point to 1.41%; and the forbearance share for portfolio loans and private-label securities (PLS) declined 11 basis points to 1.03%.

MBA’s Loan Monitoring Survey requests that servicers report all loans in forbearance regardless of the borrower’s stated reason—whether pandemic-related, due to a natural disaster, or another cause.

Providing greater insight into the September forbearance report, Marina Walsh, MBA’s Vice President of Industry Analysis, said:

“The overall share of loans in forbearance increased slightly in October, but it was a mixed bag by investor type. The forbearance rate for Ginnie Mae, Fannie Mae, and Freddie Mac loans increased, and there was a decline in portfolio and PLS loans in forbearance. Several factors were behind the first monthly increase in forbearances in 29 months, including the effects of Hurricane Ian in the Southeast, the diminishing number of loans bought out of Ginnie Mae pools and placed in portfolio, and the fact that new forbearance requests have closely matched forbearance exits for the past three months.

The overall share of loans that were current last month decreased 15 basis points to 95.70%, with 44 states reporting declines (not delinquent or in foreclosure). Florida, which was hit the hardest by Hurricane Ian, experienced a 49-basis-point drop in the share of loans that were current—the biggest decline of all states.”