The total number of mortgage loans currently in forbearance has decreased for the first time since the Mortgage Bankers Association (MBA) began its weekly forbearance and call volume survey in March. During the week ending on June 14, loans in forbearance decreased to 8.48 percent, down from 8.55 percent the previous week, according to the MBA’s most recent survey released on Monday.
There are now roughly 4.2 millions homeowners enrolled in forbearance plans, down from 4.3 million homeowners the week prior, according to MBA’s estimates.
Fannie Mae and Freddie Mac loans in forbearance decreased for the second consecutive week to 6.31 percent. Portfolio loans and private-label securities (PLS) in forbearance also dropped significantly during this period, by 19 basis points to 9.99 percent. Likewise, loans in forbearance for depository services declined to 9.15 percent from 9.24 percent the previous week, and loans in forbearance for independent mortgage bank (IMB) servicers declined to 8.40 percent from 8.43 percent the week before. Ginnie Mae loans in forbearance, however, remained constant for the third week in a row at 11.83 percent.
“The lower share of loans in forbearance was led by declines in GSE and portfolio and PLS loans, as more of those borrowers exited than entered a new forbearance plan,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement. “Fewer homeowners in forbearance underscores the continued improvements in the job market, and provides another sign of the fundamental health of the housing market, which has rebounded considerably over the past several weeks.”
Across all investor types, forbearance requests as a percent of servicing portfolio volume declined from 0.19 percent the previous week to 0.15 percent the week ending June 14.
Although it’s unclear whether the expiration of benefits through the CARES Act at the end of July will significantly impact the percentage of homeowners requesting forbearance, Fratantoni expressed optimism for the near future.
“The big unknown with respect to this positive development is the extent to which it relies upon policy measures put in place to help families through this crisis, particularly the stimulus payments and enhanced unemployment insurance benefits that were key parts of the CARES Act,” Fratantoni said in a statement. “We expect to see further improvements in the weeks ahead given the drop in forbearance requests this week.”