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MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 4.22%"

by Calculated Risk on 5/17/2021 04:00:00 PM

Note: This is as of May 9th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 4.22%

The Mortgage Bankers Association’s (MBA) latest Forbearance
and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 14
basis points from 4.36% of servicers’ portfolio volume in the prior week to 4.22% as of May 9, 2021.
According to MBA’s estimate, 2.1 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 8 basis points to 2.24%.
Ginnie Mae loans in forbearance decreased 21 basis points to 5.61%, while the forbearance share for
portfolio loans and private-label securities (PLS) decreased by 29 basis points to 8.26%. The percentage
of loans in forbearance for independent mortgage bank (IMB) servicers decreased 16 basis points to
4.42%, and the percentage of loans in forbearance for depository servicers declined 12 basis points to
4.35%.

“More homeowners exited forbearance in the first full week of May, leading to a 14-basis-point
decrease in the forbearance share – the 11th straight week of declines. The rate of new requests
dropped to 4 basis points, which is the lowest level since last March,” said Mike Fratantoni, MBA’s
Senior Vice President and Chief Economist. “Of those in forbearance extensions, more than half have
been in forbearance for more than 12 months.”

Added Fratantoni, “The opening of the economy, as the successful vaccination effort continues, should
lead to further reductions in the forbearance share. However, many homeowners continue to struggle.
Borrowers who are reaching the end of their forbearance term should reach out to their servicer to
review their options.”
emphasis added

MBA Forbearance Survey Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time. Most of the increase was in late March and early April, and has trended down since then.

The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.05% to 0.04%”

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