The Share of Mortgage Loans in Forbearance Up Again in the Week Ending 22nd November 2020

The latest Mortgage Banker Association’s (MBA) Forbearance and Call Survey reports the total number of loans now in forbearance increased from 5.48% of servicers’ portfolio volume in the prior week to 5.54% as of November 22, 2020. According to MBA’s estimate, 2.8 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance increased for the first time in 25 weeks to 3.36% – a 1-basis-point increase. Ginnie Mae loans in forbearance increased 10 basis points to 7.83%, and the forbearance share for portfolio loans and private-label securities (PLS) increased by 15 basis points to 8.63%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers increased 9 basis points from the previous week to 6.03%, and the percentage of loans in forbearance for depository servicers increased 3 basis points to 5.47%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist in a prepared statement said, “For the second week in a row, the share of loans in forbearance has increased, driven by a rise in new forbearance requests and another slowdown in the pace of forbearance exits.” “Additionally concerning, there was an increase in forbearance re-entries, as borrowers who had previously exited sought relief again. The increase in new forbearance requests may be the result of additional outreach to homeowners who had previously not taken advantage of forbearance opportunities. However, the slowing rate of exits to a new survey low further highlights that borrowers still in forbearance are increasingly challenged by the renewed restrictions on economic activity to contain the surge in COVID-19 cases.”