Mortgage Forbearance Rate Drops Slightly For Another Week

The rate of mortgage loans in forbearance dropped again this week, signaling a continued improvement in those numbers, albeit one that is slowing down amid signs of a potential increase.

The mortgage forbearance rate “decreased by 1 basis point from 3.48% of servicers’ portfolio volume in the prior week to 3.47% as of July 25, 2021,” the Mortgage Bankers Association said in its weekly Monday forbearance report.

Though the week-over-week numbers were encouraging, MBA Senior Vice President and Chief Economist Mike Fratantoni warned in the report that the trendline is not entirely encouraging.

“Forbearance exits remained low, and there was another increase in new forbearance requests, particularly for Ginnie Mae and portfolio and PLS loans,” he said. “The net result was another slight decline in the share of loans in forbearance.”

“While the overall number of loans in forbearance has changed little in recent weeks, forbearance re-entries have increased, reaching 7.2% this week,” he added. “Recent economic data continue to show improvement, but it’s clear many homeowners in forbearance still need the relief that is being provided.”