Forbearance rate holds after two weeks of growth

After two weeks of increases, the number of mortgages in coronavirus-related forbearance stayed static between Nov. 23 and 29, according to the Mortgage Bankers Association.

Home loans in forbearance plans represent 5.54% — approximately 2.8 million homeowners — of all outstanding mortgages, flat from the week earlier. The share of forborne loans at independent mortgage bank servicers edged downwards to 6.02% from 6.03%, while depositories inched up to 5.48% from 5.47%.

"While new forbearance requests declined for the week, exits slowed to a new low for the series," Mike Fratantoni, the MBA's senior vice president and chief economist, said in a press release. "The job market data for November showed an economic recovery that was slowing in response to the latest surge in COVID-19 cases. It is not surprising to see the rate of forbearance exits slow, as households that needed forbearance assistance in October may be in even greater need now."

Conforming mortgages — those purchased by Fannie Mae and Freddie Mac — broke a six-month streak of decreases last week but picked back up and dropped to 3.34% from 3.36%. GSE forbearances continue to lead all segments.

Forbearance in Ginnie Mae loans — Federal Housing Administration, Department of Veterans Affairs and U.S. Department of Agriculture Rural Housing Service products — rose to 7.89% from 7.83%. Private-label securities and portfolio loans in forbearance — products not addressed by the coronavirus relief act — also increased to 8.7% from 8.63%.

A 19.81% share of all forborne mortgages sit in the initial forbearance stage while 77.9% shifted to extended plans and the remaining 2.29% re-entered forbearance after exiting previously.

Forbearance requests as a percentage of servicing portfolio volume fell to 0.08% from 0.11% the week previous. Call center volume as a percentage of portfolio volume dropped to 5.3% — a survey low — from 7.7%.

The MBA's sample for this week's survey includes a total of 48 servicers with 25 independent mortgage bankers and 21 depositories. The sample also included two subservicers. By unit count, the respondents represented about 74%, or 37.2 million, of outstanding first-lien mortgages.