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The Week Ahead: Positive Trends Signal Drop in Forbearances

in Daily Dose, Featured, Foreclosure, Journal, News May 21, 2021 1,586 Views

Monday afternoon marks the release of the latest Forbearance and Call Volume Survey from the Mortgage Bankers Association (MBA), and with a steady decline in forbearance volume, will the trend continue?

There are currently an estimated 2.1 million homeowners in forbearance plans, a number that has dropped weekly for 11 consecutive weeks. Last week, 4.22% of servicers' portfolio volume represented loans in forbearance, down 14 basis points from the previous week’s share of 4.36%.

"The opening of the economy, as the successful vaccination effort continues, should lead to further reductions in the forbearance share,” said Mike Fratantoni, MBA's SVP and Chief Economist. “However, many homeowners continue to struggle. Borrowers who are reaching the end of their forbearance term should reach out to their servicer to review their options."

With more and more Americans returning to the workforce and regaining their financial footing after the pandemic, will that number of homeowners in forbearance plans continue to plummet?

This week, the U.S. Department of Labor reported the number of initial unemployment claims was initial claims was 444,000, a decline of 34,000 from the previous week's revised level, marking the lowest level for initial claims since March 14, 2020 when unemployment claims stood at 256,000.

That number, combined with the MBA’s total mortgage application volume rising 1.2% week-over-week, are two key spots that could signal economic strength in the near term.

Here's what else is happening in The Week Ahead:

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About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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