Forbearance numbers fall for 11th consecutive week

The number of homeowners in forbearance registered another weekly decline, part of a months-long trend that will likely continue, according to the Mortgage Bankers Association.

According to the MBA’s regular survey of lenders for the week of May 3, the share of borrowers in forbearance plans fell for the eleventh consecutive week, with the number now at 4.22% of total mortgages, equal to approximately 2.1 million homeowners. The percentage is down from 4.36% one week earlier. A year ago, more than four million borrowers had sought mortgage assistance, as the U.S. reeled from the initial economic effects of the global pandemic.

The rate of new forbearance requests as a share of portfolio volume also dropped to its lowest point since March, down slightly to 0.04% for the week from 0.05%.

“The opening of the economy, as the successful vaccination effort continues, should lead to further reductions in the forbearance share.” said Mike Fratantoni, the MBA’s senior vice president and chief economist.

Along with the steady pace of forbearance exits, a recent uptick of new mortgage applications reflect an improving economic outlook, based on the association’s applications survey published on May 12.

Many homeowners continue to struggle, though, and those approaching the end of their forbearance term should contact their servicers for assistance, Fratantoni said.

“Of those in forbearance extensions, more than half have been in forbearance for more than 12 months,” he said.

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Ginnie Mae mortgages backed by the Federal Housing Administration, Department of Veterans Affairs or U.S. Department of Agriculture made up a 25.24% share of overall servicing volume, while Fannie Mae and Freddie Mac conforming loans made up 55.98% and private-label securities and portfolio loans — packages which have not qualified for any relief in coronavirus stimulus programs — took up a 18.78% share.

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Forbearance numbers fell across all investor types. The share of Ginnie Mae mortgages in forbearance dipped to 5.61% from 5.82% week over week, while forborne Fannie Mae and Freddie Mac loans decreased to 2.24% from 2.32%. Forbearances among portfolio loans and private-label securities, also declined to 8.26% from 8.55%.

The share of mortgage forbearance at independent mortgage companies dropped to 4.42% from 4.58% a week earlier, and those held in depositories fell to 4.35% from 4.47%.

Of all forborne loans, 11.9% were in the initial stage, and 83% were in extension. The remaining 5.1% consisted of borrowers re-entering the forbearance process.

Call center volume as a percentage of portfolio volume saw a weekly increase to 8% from 7.8%

The MBA’s survey results for the week icluded data reported by 48 servicers — 25 independent mortgage companies, 21 depositories and two subservicers, accounting for 37.1 million loans or 74% or the first-mortgage servicing market.

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