Mortgage Bankers Say Mortgage Forbearance Decreased To 2.62%. Ginnie Mae’s Portfolio Finally Below 3%

The Mortgage Bankers Association is saying mortgage forbearances are down .27%. They also stated that forbearance portfolio volume declined at the fastest rate in a year. This is in part to mortgage holders exit COVID-19 plans. Exits are expected to pick up the pace in the weeks ahead due to economic improvement.

The total number of loans in forbearance decreased to 2.62% as of October 3rd. In the previous week, the rate dropped seven basis points to 2.89%  

The MBA also stated all categories showed declines. The most notable case was with Ginnie Mae. The Ginnie Mae portfolio dropped by 41 bps to 2.94%. This is the first time, since the beginning of the pandemic that Ginnie Mae’s mortgage forbearances dropped below 3%. Meanwhile, Fannie Mae and Freddie Mac loans dropped by 17 basis points to 1.21%.

The loans and private-label securities (PLS) category showed a decline of 35 bps, to 6.42%. For depository servicers, the percentage declined 24 bps to 2.69%. The share of independent mortgage bank loans in forbearance fell 37 basis points to 2.82%.

Per the MBA’s estimate, 1.3 million homeowners are still in active forbearance plans. The survey included data on 36.5 million loans serviced as of Oct. 3, 73% of the first-mortgage servicing market.

Homeowners Are Exiting Mortgage Forbearances At Record Speed

Despite weaker than expected job growth in September because of the Delta variant and supply chain challenges, dropping unemployment rate, rising wages, and abundant job openings will continue to help borrowers exit forbearance.

During the last 15 months, MBA’s data revealed that 28.8% of exits resulted in a loan deferral or partial claim. Also, 21.3% represented borrowers who continued to pay during the forbearance period. However, 16.5% were borrowers who did not make their monthly payments and did not have a loss mitigation plan.

The survey shows that 13.3% of total loans in forbearance were in the initial stage last week, and 77.5% were in a forbearance extension. The remaining 9.2% were re-entries.

Total requests were at 0.05% of servicing portfolio volume, while exits represented 0.33% of the total – in the previous week, the share was 0,12%, the report said. Servicer call volume increased to 7.8% of the servicing portfolio volume last week, up from 5.9% the week prior.  

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