- DSNews - https://dsnews.com -

Forbearance Activity Ended 2020 on a Flat Note

New data published by the Mortgage Bankers Association (MBA [1]) 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.”