MBA: Forbearances Fall Again

Forbearances fell again last week, continuing to trend down as relief plans expire, according to the Mortgage Bankers Association’s (MBA) latest survey. Forbearances made up just 2.96% of servicers’ portfolio volume, down from 3.00%. It’s the first time they’ve fallen below 3% since March 2020. The estimated number of homeowners in forbearance plans is around 1.5 million.

For Fannie Mae and Freddie Mac loans, the August 2021 number was down three basis points to 1.44%. Ginnie Mae loans rose three basis points to 3.42%. Portfolio loans and private-label securities shares fell four basis points, from 6.95% to 6.91%.

Independent mortgage bank servicers saw a drop of one basis point to 3.24%, and the share for depository servicers declined four points to 3.06%.

“The share of loans in forbearance continued to decrease last week, dropping below 3 percent for the first time since March 2020,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.

“However, there was a slight increase in the forbearance share for Ginnie Mae loans, and this increase was seen for both depository and IMB servicers. New forbearance requests and re-entries continue to run at a higher rate for Ginnie Mae loans as well as for portfolio and PLS loans, which include many delinquent FHA, VA, and USDA loans that have been bought out of Ginnie Mae pools.”

Freddie Mac has indefinitely extended its multi-family home forbearance program ahead of its September 30 expiration date. Four hundred thousand forbearance plans will expire by the end of the month.

Here are some more highlights from the survey:

  • Total loans in forbearance decreased by 4 basis points relative to the prior week: from 3.00% to 2.96%.
    • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 3.39% to 3.42%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 1.47% to 1.44%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 6.95% to 6.91%.
  • By stage, 12.0% of total loans in forbearance are in the initial forbearance plan stage, while 79.3% are in a forbearance extension. The remaining 8.7% are forbearance re-entries.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.05%.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of September 19, 2021:
    • Total: 2.96% (previous week: 3.00%)
    • IMBs: 3.24% (previous week: 3.25%)
    • Depositories: 3.06% (previous week: 3.10%)