Shares of Mortgage Loans in Forbearance Slightly Lower in August; 360,000 Homeowners Still Remain

According to the new monthly Mortgage Bankers Association (MBA) Loan Monitoring Survey (LMS), the total number of loans now in forbearance decreased by 2 basis points, from 0.74% of servicers’ portfolio volume in the prior month to 0.72% as of August 31, 2022. The MBA estimates that 360,000 homeowners still remain in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.32%; Ginnie Mae loans in forbearance increased to 1.32%; and the forbearance share for portfolio loans and private-label securities (PLS) declined 8 basis points to 1.26%.

Providing additional background on the August forbearance report, Marina Walsh, CMB, MBA’s Vice President of Industry Analysis, said:

“The overall number of loans in forbearance continues to trickle down, but there was an increase in Ginnie Mae forbearances in August. From January 2021 through May 2022, the Ginnie Mae forbearance rate was declining—albeit at a slower pace in 2022 compared to 2021. In June and July this year, the rate stayed flat. Last month, Ginnie Mae new forbearance requests and re-entries outpaced forbearance exits and there was a decline in post-forbearance workout performance among government loans. Despite this activity, the overall performance of the Ginnie Mae portfolio still improved to 94.57 percent current.

There may be pressures on portfolio performance and post-forbearance workout performance in the months ahead—particularly for government loans—if the record-low unemployment rate rises and personal savings decreases amidst high inflation.”