Mortgage Forbearance Falls Again, Continuing Months-Long Trend

The share of U.S. mortgages in forbearance fell again this week, continuing a months-long trend of declining dire straits for American homeowners.

The Mortgage Bankers Association said in a press release on Monday the number of mortgage forbearances—in which banks agree to put collection and enforcement of loans temporarily on hold—decreased by seven basis points, from 3.47 percent to 3.40 percent.

The decrease comes after several months of similar decline in forbearance rates, an indication of the U.S.’s steady albeit at-times limping economic recovery over the first half of 2021.

“Forbearance exits increased as August began, and new forbearance requests declined, resulting in the largest decrease in the share of loans in forbearance in three weeks,” MBA Senior Vice President Mike Fratantoni said in the release.

He noted that 1.7 million homeowners remain in forbearance, “13% of whom were current on their payments as of August 1st.” 

“Of those who exited forbearance last week, more than 10.5% were current,” he added. “Forbearance has surely provided both insurance and assurance for many of these homeowners who worried about ongoing hardships, and it is positive to see so many continue to be able to make their payments while in forbearance.”