Forbearance Survey: Certain Borrowers ‘Disproportionately Impacted’

Fannie Mae and Freddie Mac loans in forbearance dropped while private loans and those owned by Ginnie Mae experienced an increase, according to the Mortgage Bankers Association's (MBA) latest Forbearance and Call Volume Survey.

The total number of loans now in forbearance remained unchanged relative to the prior week at 7.20% as of August 23. According to MBA's estimate, 3.6 million homeowners are in active-forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 12^th week in a row to 4.88% - a 5-basis-point improvement. Ginnie Mae loans in forbearance increased by 4 basis points to 9.58%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 7 basis points to 10.44%. The percentage of loans in forbearance for depository servicers increased to 7.49%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 7.41%.

"The share of loans in forbearance was unchanged, as the decline in the share of GSE loans was offset by increases for Ginnie Mae, and portfolio and PLS loans. The pace of new forbearance requests has been relatively flat across investor types, but for those with GSE loans, the rate of exits from forbearance regularly exceeds the rate of new requests," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "The exception in these trends are borrowers with Ginnie Mae loans. The loss of enhanced unemployment insurance benefits, coupled with a consistently high rate of layoffs and uncertainty about the job market, are having a disproportionate impact on FHA and VA borrowers."

MBA's latest Forbearance and Call Volume Survey represents 75% of the first-mortgage servicing market (37.3 million loans). More detailed findings of  MBA's Forbearance and Call Volume Survey, August 17 to August 23, are as follows:

Total loans in forbearance remained unchanged relative to the prior week at 7.20%.

By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 9.54% to 9.58%.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.93% to 4.88%.

The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 10.37% to 10.44%.

By stage, 36.71% of total loans in forbearance are in the initial forbearance plan stage, while 62.43% are in a forbearance extension. The remaining 0.86% are forbearance re-entries.

Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained unchanged relative to the prior week at 0.10%.

The report also detailed weekly servicer call center volume, which showed:

As a percent of servicing portfolio volume (#), calls decreased from 8.7% to 7.2%.

• • • Average speed to answer decreased from 2.8 minutes to 2.2 minutes.
    • Abandonment rates decreased from 5.7% to 4.9%.
    • Average call length increased from 7.2 minutes to 7.7 minutes.
    • Loans in forbearance as a share of servicing portfolio volume (#) as of August 23, 2020:
      • Total: 7.20% (previous week: 7.20%)
      • IMBs: 7.41% (previous week: 7.43%)
      • Depositories: 7.49% (previous week: 7.48%)