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Forbearance Activity Ended 2020 on a Flat Note

New data published by the Mortgage Bankers Association (MBA) has determined the number of mortgages now in forbearance remained mostly flat at the tail end of December.

According to the MBA’s latest Forbearance and Call Volume Survey, 5.53% of servicers’ portfolio volume, or 2.7 million loans, were in forbearance plans as of December 27, unchanged from the ending December 21 the percentage and up slightly from the 5.48% in the week ending December 14. By investor type, the share of Ginnie Mae loans in forbearance saw the greatest uptick, from 7.87% to 7.92%–the highest level since the week of November 1–while the share of Fannie Mae and Freddie Mac loans in forbearance dipped over the same period from 3.26% to 3.24%.

Among other loan categories, the forbearance share for portfolio loans and private-label securities (PLS) fell from 8.89% to 8.87% while the forbearance share for independent mortgage bank servicers decreased 3 basis points 6.01% and the percentage for depository servicers increased 1 basis points from the previous week to 5.44%.

The MBA found 18.78% of total loans in forbearance were in the initial forbearance plan stage for the week ending December 27 while 79.61% were in a forbearance extension and the remaining 2.11% were forbearance re-entries. Total weekly forbearance requests as a percent of servicing portfolio volume registered 0.06%, the lowest level since the week ending March 15.

New lows were also set for weekly servicer call center volume–the percentage of forbearance-related calls decreased from the previous week from 8.3% to 4.7%, while the average speed to answer decreased from 2 minutes to 1.1 minutes and abandonment rates dropped from 5.9% to 3.7%, a survey low.

Mike Fratantoni, MBA's SVP and Chief Economist, noted 2020 ended with a whimper in regards to forbearance.

“Forbearance requests and exits both slowed markedly, and servicer call volume dropped sharply over the holidays,” he said. “While the increasing number of COVID-19 cases continues to slow economic activity, the passed stimulus legislation should provide financial support for many households as the vaccine rollout commences.”

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.
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