The total number of loans in forbearance remained relatively unchanged, declining by one basis point to 3.25% as of Aug. 15, according to the Mortgage Bankers Association’s latest tally. Though the drop is more subdued than in previous weeks, the decline continues a downward trend across most categories.
Fannie Mae and Freddie Mac loans decreased by three bps from 1.69% to 1.66%, while Ginnie Mae loans dropped three bps to 3.92%, the MBA said.
However, the portfolio loans and private-label securities (PLS) share remained elevated, increasing 10 bps to 7.15%.
Mike Fratantoni, senior vice president and chief economist at the MBA, noted that “Portfolio and PLS loans now account for almost 50% of all depository servicer loans in forbearance…which highlights the importance of the investor category.”
Fratantoni also said that the muted results of the survey are in part due to a slower pace of new requests and exits compared to a year prior.
“In fact, exits were at their slowest pace in over a year,” he added. (The volume of weekly forbearance requests decreased from 0.06% to 0.05%.)
The trade group estimates that currently 1.6 million borrowers are in forbearance.
Meanwhile, the survey shows that 10% of total loans are in the initial forbearance stage and that 82.3% are in a forbearance extension. The remaining 7.7% are forbearance re-entries, the MBA said.
Out of the borrowers who exited forbearance from June 1, 2020 through Aug. 15, 2021, 28.3% opted for a loan deferral/partial claim and 22.6% continued making their monthly payments during their forbearance period.
Despite numerous loss mitigation options offered by the FHA and the FHFA, 16.1% of borrowers who exited forbearance during this time period did not make their monthly payments while in forbearance and exited forbearance without a loss mitigation option in place, the survey said.
Weekly servicer call center volume was also muted relative to the prior week, with the percent of calls decreasing from 7.5% to 7.3%, the MBA concluded.