US Mortgage Loans in Forbearance Trend Lower in March

On Tuesday, the Mortgage Bankers Association (MBA) released its latest Loan Monitoring Survey. As of March 31, the total number of loans in forbearance declined 2 basis points from 0.38% of servicers’ portfolio volume in the prior month to 0.36%.

An estimated 180,000 homeowners are now in a forbearance plan. MBA notes that since March 2020, approximately 8.6 million borrowers have been provided forbearance.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.13%; Ginnie Mae loans in forbearance decreased by 1 basis points to 0.83%; and the forbearance share for portfolio loans and private-label securities (PLS) decreased 4 basis points to 0.33%.

Commenting on the report, MBA Vice President of Industry Analysis Marina Walsh said:

“Overall mortgage performance improved in March, with more borrowers making their mortgage payments and fewer borrowers in forbearance and loan workouts compared to the prior month. This monthly improvement may be tied to several factors such as receipt of tax refunds and homeowner recovery from natural disasters.

The labor market is relatively healthy, which is helping mortgage performance remain strong. However, compared to one year ago, there are fewer borrowers current on their mortgages. Also, more borrowers in loan workouts—particularly those with FHA loans—are having difficulty staying current.”