The Mortgage Bankers Association (MBA) has released its most recent Forbearance and Call Volume Survey results [1], covering the period from July 13 through July 19, 2020. The survey, which represents three-quarters of the first-mortgage servicing market (a total of 37.3 million loans), shows that the total number of loans currently in forbearance has fallen by six basis points from last week.
Specifically, the statistics show that loans in forbearance decreased from last week’s 7.80% of servicers' portfolio volume to 7.74%. This loosely translates into 3.9 million homeowners being currently embroiled in forbearance plans (estimate provided by MBA).
The survey further breaks down particular details regarding specific loaning institutions, including Fannie Mae [2] and Freddie Mac [3]. MBA reported that loans financed by the GSEs and currently in forbearance fell for the seventh week in a row (down to 5.49%). This change marks a 15-basis-point improvement.
Regarding Ginnie Mae loans in forbearance, those rose by one basis point (up to 10.27%). As for the forbearance share for portfolio loans and private-label securities (PLS), those increased by 12 basis points (up to 10.53%). The percentage of loans in forbearance for depository servicers also experienced a drop (down to 8.06%), and those loans currently in forbearance for independent mortgage bank (IMB) servicers experienced an uptick (rising to 7.85%).
MBA's SVP and Chief Economist Mike Fratantoni commented on these recently divulged details: "The share of loans in forbearance declined by a smaller amount than in previous weeks, as the pace of borrowers exiting forbearance slowed. Although the GSE portfolio of loans in forbearance should continue to improve, Ginnie Mae's portfolio saw an uptick of both loans in forbearance and borrowers requesting forbearance. The high level of unemployment claims in recent weeks may be playing a role, as weakness would likely impact Ginnie Mae's portfolio first."
Fratantoni continued: "As a result of large buyouts from Ginnie Mae pools in recent weeks, many FHA and VA loans are now being held as portfolio loans by bank servicers. That is why the share of portfolio loans in forbearance has increased and is now typically at a higher level than that for Ginnie Mae loans."