Mortgage forbearance growth rate grinds down, Ginnie Mae still reeling

The pace of growth in the total mortgages with coronavirus-related forbearance wound down again, as the number of forborne loans increased only 10 basis points between May 18 and May 24, according to the Mortgage Bankers Association.

About 8.46% of all outstanding loans or just over 4.2 million mortgages sat in forbearance plans as of May 24, compared to 8.36% and nearly 4.2 million the week before.

The share of loans in forbearance at independent mortgage bank servicers grew at the same rate, increasing to 8.21% from 8.11% over that period. While forborne mortgages represent a larger share of outstanding loans at depositories, their pace of growth trailed that seen in the nonbank sector, inching up to 9.19% from 9.13%.

"MBA's survey continues to indicate that fewer homeowners are seeking forbearance as more states across the country reopen their economies and prospects begin to improve," Mike Fratantoni, the MBA's senior vice president and chief economist, said in a press release.

For the seventh consecutive week, forbearance requests as a percentage of servicing portfolio volume dropped, falling to 0.2% on May 24 from 0.28% on May 17. Call center volume as a percentage of portfolio volume declined to 6.4% from 8.6%.

"Forbearance requests and call volume declined relative to the prior week and led to further declines in wait times and abandonment rates,” Fratantoni said.

Ginnie Mae mortgages — Federal Housing Administration, Department of Veterans Affairs and U.S. Department of Agriculture Rural Housing Service products — rose again and accounted for the highest percentage of loans in forbearance by investor type, increasing to 11.82% from 11.6%.

"Policy support for households, including expanded unemployment insurance benefits and other transfers, have helped many stay on their feet during this crisis," Fratantoni said. "With 11.82% of Ginnie Mae loans currently in forbearance, FHA and VA borrowers are struggling the most."

The share of conforming mortgages — those purchased by Fannie Mae and Freddie Mac — in forbearance climbed to 6.39% from 6.36%. The share of forbearance of private-label securities and portfolio loans — products which were not addressed by the coronavirus relief act — also grew, going to 9.67% from 9.54% one week earlier.

The MBA's sample for this week's survey includes a total of 55 servicers including 30 independent mortgage bankers and 23 depositories. Two subservicers also were part of the sample. By unit count, the respondents represented nearly 75%, or 37.6 million, of outstanding first-lien mortgages.