Shares of Mortgage Loans in Forbearance Remained Unchanged in December

According to the Mortgage Bankers Association’s (MBA) new Loan Monitoring Survey (LMS), the total number of loans now in forbearance was unchanged from November’s reading of 0.70%, as of December 31, 2022. This marks the third consecutive month of the LMS being unchanged. The MBA estimates that 350,000 homeowners are now in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 1 basis points to 0.31%; Ginnie Mae loans in forbearance decreased by 1 basis point to 1.45%; and the forbearance share for portfolio loans and private-label securities (PLS) increased 3 basis points to 1.00%.

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

“For three consecutive months, the foreclosure rate has remained flat—an indicator that we may have reached a floor on further improvements. New forbearance requests and re-entries continue to trickle in at about the same pace as forbearance exits. The overall performance of servicing portfolios was also flat compared to the previous month, but there was some deterioration in the performance of Ginnie Mae loans.

Forbearance remains an option for struggling homeowners and its usage may continue, especially if unemployment increases as expected. MBA is forecasting the unemployment rate to reach 5.2% in the second half of 2023, up from its current level of 3.5%.”