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Report Reflects Steady, Low Level of Forbearance Requests

house duskThe rate of mortgage loans in forbearance declined at a relatively swift pace over the final week of April, according to the Mortgage Bankers Association (MBA), which collects and publishes weekly data on forbearance numbers and requests covering about 74% of the mortgage servicing market.

MBA reports the total number of loans in forbearance decreased the week ending May 2 by 11 basis points from 4.47% of servicers' portfolio volume in the prior week to 4.36%. The association estimates 2.2 million homeowners are in forbearance plans.

Broken down by type of loan, MBA reported:

  • The share of Fannie Mae and Freddie Mac loans in forbearance decreased 10 points to 2.32%.
  • Ginnie Mae loans in forbearance decreased 20 basis points to 5.82%.
  • Portfolio and private-label securities (PLS) loans remained unchanged at 8.55%.
  • Independent mortgage bank (IMB) servicers decreased 12 basis points to 4.58%.
  • And the percentage of loans in forbearance for depository servicers declined 15 basis points to 4.47%.

"The pace in the declining share of loans in forbearance quickened in the last week of April. This 10th week of decreases reflected a faster rate of exits and a steady, low level of new requests," said Mike Fratantoni, MBA's SVP and Chief Economist. "Homeowners who have exited forbearance and been able to take up their original payment again are performing at almost the same rate as the overall mortgage servicing portfolio."

Added Fratantoni, "More than 47% of borrowers in forbearance extensions are past the 12-month mark as of the end of April. Many homeowners continue to struggle and are falling farther behind on their obligations each month. We expect that a robust economic and job market recovery over the next several months will help these families regain their jobs and their incomes."

The Consumer Financial Protection Bureau (CFPB) recently issued two reports showing that more work needs to be done to help mortgage borrowers coping with the COVID-19 pandemic and economic downturn. The first, “Characteristics of Mortgage Borrowers During the COVID-19 Pandemic,” documents that Black and Hispanic mortgage borrowers are far likelier to be delinquent or in a forbearance program than white borrowers. In a second report, the CFPB reports that overall mortgage complaints to the CFPB have risen to their highest level in three years.

“More borrowers are behind on their mortgage than at any time since the height of the Great Recession,” CFPB Acting Director Dave Uejio said last week. “Communities of color have been hit hard by the pandemic, and the latest data show that many borrowers are still hurting. The CFPB will continue to seek and actively respond to developments in the market, doing everything in our power to help families stay in their homes. As we warned mortgage servicers last month, unprepared is unacceptable.”

In order to prevent the windfall of foreclosures that may overwhelm servicers, the CFPB also proposed a number of actions and continues to seek input on new proposed rules.

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. Contact Christina at christina.hughesbabb@thefivestar.com.

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