The Share of Mortgage Loans in Forbearance Drops to 6.32% in Week ending 4th October 2020

The latest Mortgage Banker Association’s (MBA) Forbearance and Call Survey reports the total number of loans now in forbearance decreased by 49 basis points from 6.81% of servicers’ portfolio volume in the prior week to 6.32% as of October 4, 2020. The MBA estimates, 3.2 million homeowners are in forbearance plans. According to the survey the share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 18th week in a row to 4.03% – a 36-basis-point improvement. Ginnie Mae loans in forbearance decreased 89 basis points to 8.27%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 33 basis points to 10.06%. The percentage of loans in forbearance for depository servicers decreased 50 basis points to 6.53%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 54 basis points to 6.65%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist in a prepared statement said, “The share of loans in forbearance declined across all loan types. With the forbearance program for federally backed loans under the CARES Act reaching the six-month mark, many borrowers saw their forbearance plans expire because they did not contact their servicer. Another reason for expirations was that borrower information needed to determine an appropriate loss mitigation option was not yet in place.”