The latest Mortgage Bankers Association (MBA) Forbearance and Call Volume Survey  as of July 4, 2021 has found that the total number of loans now in forbearance decreased by 11 basis points from 3.87% of servicers' portfolio volume in the prior week to 3.76%. The MBA estimates that approximately 1.9 million U.S. homeowners are currently in some stage of forbearance plan.
"Forbearance exits increased in the week of the July 4th holiday to the fastest pace since early April," said Mike Fratantoni , MBA's SVP and Chief Economist. "New requests stayed very low, resulting in a large drop in the share of loans in forbearance, particularly for Ginnie Mae loans, which also continue to be impacted by buyouts of delinquent loans. These loans are tracked as portfolio loans after a buyout."
The share of government-sponsored enterprise (GSE)—Fannie Mae and Freddie Mac—loans in forbearance decreased eight basis points from 1.99% to 1.91%.
As Fratantoni noted, Ginnie Mae loans in forbearance decreased a whopping 32 basis points from 5.10% to 4.78%, while the forbearance share for portfolio loans and private-label securities (PLS) increased two basis points to 7.94%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 13 basis points, from 4.0% to 3.87%, and the percentage of loans in forbearance for depository servicers also decreased 13 basis points from 4.11% to 3.98%.
One positive trend which may expedite forbearance exits is the latest jobs report  from the Bureau of Labor Statistics (BLS) who reported that the American economy added 850,000 jobs in the month of June. However, unemployment claims last week  saw a slight rise, as for the week ending July 3, the advance figure for seasonally adjusted initial unemployment claims was 373,000, an increase of 2,000 from the previous week's revised level.
By stage, 10.8% of total loans in forbearance were in the initial forbearance plan stage, while 82.7% were in a forbearance extension, and the remaining 6.5% were in forbearance re-entries.
Of the cumulative forbearance exits for the period from June 1, 2020 through July 4, 2021:
- 27.8% resulted in a loan deferral/partial claim.
- 23.5% represented borrowers who continued to make their monthly payments during their forbearance period.
- 15.5% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 13.5% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 10.7% resulted in a loan modification or trial loan modification.
- 7.5% resulted in loans paid off through either a refinance or by selling the home.
- 1.5% resulted in repayment plans, short sales, deed-in-lieus, or other reasons.
"The mortgage delinquency rate across the entire servicing portfolio declined in June compared to May,” added Fratantoni. “However, the delinquency rate slightly increased for homeowners who have completed a workout. Borrowers who are exiting forbearance now are likely to have been in relief for over a year, with almost 60% of borrowers in forbearance extensions of longer than 12 months. These borrowers may face more challenges getting back to making regular payments."
In terms of servicer call center volume, calls increased relative to the prior week, from 5.9% to 7.3%, with the average speed to answer increasing from 1.0 minutes to 1.5 minutes, and the average call length rising slightly from 7.8 minutes to 8.0 minutes.