The number of new forbearance requests remained low this past week, and overall, the share of mortgage loans in active forbearance dropped by 11 basis points from 4.04% of servicers' portfolio volume to 3.93% during the week ending June 13, according to the weekly forbearance report from Mortgage Bankers Association (MBA). That leaves some 2 million forborne mortgagers in such plans, MBA's researchers report. The survey also revealed an important option for those exiting forbearance, according to economists at MBA.
Broken down by type of loan, MBA reports that forbearances declined across the board—government-sponsored agency Fannie Mae and Freddie Mac-backed loans decreased four basis points to 2.05%. Ginnie Mae-backed mortgage forbearances dipped seven basis points to 5.15%. The forbearance share for portfolio loans and private-label securities are down 35 basis points for the week to 7.98%. The percentage of loans in forbearance for independent mortgage bank servicers decreased 16 basis points to 4.05%, and the percentage of loans in forbearance for depository servicers declined three basis points to 4.16%,
"The share of loans in forbearance declined for the 16th straight week, with declines across almost every loan category," said Mike Fratantoni, MBA's SVP and Chief Economist. "New forbearance requests, at four basis points, remained at an extremely low level. More than 44% of borrowers who exited this week used a deferral plan, highlighting the importance of this option."
By stage, 10.6% of total loans in forbearance are in the initial forbearance plan stage, while 83.5% are in a forbearance extension. The remaining 5.9% are forbearance re-entries.
Of the cumulative forbearance exits for the period of the report, 27.6% resulted in a loan deferral/partial claim; 24.1% represented borrowers who continued to make their monthly payments during their forbearance period; 15.3% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet; 13.8% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance; 10.2% resulted in a loan modification: 7.5% resulted in loans paid off through either a refinance or by selling the home; and the remaining 1.5% resulted in repayment plans, short sales, deed-in-lieus, or other reasons, according to the report.
Fratantoni says that as more homeowners reach the end of their forbearance term, we should continue to see the share in forbearance decline.
"The improving job market and strong housing market are providing support for those who do exit," he said.
MBA's full forbearance and call volume report is available at mba.org.