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Forbearance Trends Hit a 5-Month Milestone

Plan StrategyThe Mortgage Bankers Association's (MBA) has released the Forbearance and Call Volume Survey for this week. The report showed that the overall number of loans now in forbearance plans has decreased by 8 basis points from 7.01% the prior week to 6.93% as of September 13.

The MBA estimated that 3.5 million homeowners are in forbearance plans.

"The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 15th week in a row to 4.55%, a 10-basis-point improvement, MBA reported. "Ginnie Mae loans in forbearance increased 3 basis points to 9.15%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased by 19 basis points to 10.52%. The percentage of loans in forbearance for depository servicers decreased 7 basis points to 7.26%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 3 basis points to 7.18%."

Mike Fratantoni, the MBA's SVP and Chief Economist said the report showed the lowest level of active forbearance plans in five months and that this is driven by an ongoing decrease of the GSEs' share of forbearance programs.

However, he added "not only the did the share of Ginnie Mae loans in forbearance increase, new requests for forbearance for these loans have increased for two consecutive weeks. While housing market data continue to show a quite strong recovery, the job market recovery appears to have slowed, and we are seeing the impact of this slowdown on FHA and VA borrowers in the Ginnie Mae portfolio."  

Key findings of MBA's Forbearance and Call Volume Survey for September 7 to September 13 included:

  • Total loans in forbearance decreased by 8 basis points relative to the prior week: from 7.01% to 6.93%.
    • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 9.12% to 9.15%.
    • The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior week: from 4.65% to 4.55%.
    • The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior week: from 10.71% to 10.52%.
  • By stage, 31.65% of total loans in forbearance are in the initial forbearance plan stage, while 67.01% are in a forbearance extension. The remaining 1.34% are forbearance re-entries.
  • Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.11% to 0.10%.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls decreased from 8.7% to 6.9%.
    • Average speed to answer increased from 3.3 minutes to 3.5 minutes.
    • Abandonment rates decreased from 7.3% to 7.0%.
    • Average call length increased from 7.7 minutes to 7.8 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of September 13, 2020:
    • Total: 6.93% (previous week: 7.01%)
    • IMBs: 7.26% (previous week: 7.33%)
    • Depositories: 7.18% (previous week: 7.21%)

The report represents 74% of the first-mortgage servicing market (37.2 million loans).

To subscribe to the full report, visit mba.org/fbsurvey.

Mortgage servicers interested in participating in the survey can email fbsurvey@mba.org

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others.
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