Shares of Mortgages in Forbearance Decline for Fifth Straight Week in Week Ending March 28, 2021

The latest Mortgage Banker Association’s (MBA) Forbearance and Call Survey reports that the total number of loans now in forbearance decreased by 6 basis points from 4.96% of servicers’ portfolio volume in the prior week to 4.90% as of March 28, 2021. According to MBA’s estimate, 2.5 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance decreased to 2.72% — a 5-basis-point improvement. Ginnie Mae loans in forbearance decreased 5 basis points to 6.78%, while the forbearance shares for portfolio loans and private-label securities (PLS) decreased by 10 basis points to 8.80%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 5 basis points to 5.18%, and the percentage of loans in forbearance for depository servicers declined 7 basis points to 5.03%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist in a prepared statement said, “The share of loans in forbearance decreased for the fifth straight week, and new forbearance requests dropped to their lowest level since March 2020. The share of loans in forbearance also decreased for all three investor categories. More than 21% of borrowers in forbearance extensions have now exceeded the 12-month mark. Of those that exited forbearance in March, more than 21% received a modification, indicating that their income had declined, and they could not afford their original mortgage payment.” Fratantoni added, “March was a turning point for the economy, with hiring shifting into a higher gear and the unemployment rate continuing to decline. However, there are still more than 4.2 million people who have been actively looking for work for more than six months. Homeowners who are still facing hardships and need to extend their forbearance term should contact their servicer.”