Shares of Mortgages in Forbearance Decline Further in Week Ending March 14, 2021

The latest Mortgage Banker Association’s (MBA) Forbearance and Call Survey reports that the total number of loans now in forbearance decreased by 9 basis points from 5.14% of servicers’ portfolio volume in the prior week to 5.05% as of March 14, 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 2.83% — a 5-basis-point improvement. Ginnie Mae loans in forbearance decreased 13 basis points to 7.03%, while the forbearance shares for portfolio loans and private-label securities (PLS) decreased by 14 basis points to 8.91%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 8 basis points to 5.37%, and the percentage of loans in forbearance for depository servicers declined 4 basis points to 5.15%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist in a prepared statement said, “New forbearance requests decreased to their lowest level since last March. Combined with a steady pace of exits, this drop in new requests resulted in a larger decline in the share of loans in forbearance across all investor categories. More than 11% of borrowers in forbearance have now exceeded the 12-month mark. We anticipate that servicers will be busy over the next month, with many homeowners opting for the extension for up to 18 months recently made available for federally-backed loans.” Fratantoni added, “The pace of economic activity is picking up as the vaccine rollout continues. We expect that a stronger job market will help many successfully exit forbearance in the months ahead.”