The total number of mortgage loans in forbearance declined 15 basis points from 7.16 percent of servicers’ portfolio volume the previous week to 7.01 percent during the week ending September 6, 2020, according to the Mortgage Bankers Association’s (MBA) weekly forbearance and call volume survey.
There are now roughly 3.5 million homeowners enrolled in forbearance plans, according to MBA’s estimates.
For the 14th consecutive week, Fannie Mae and Freddie Mac loans in forbearance declined to 4.65 percent from 4.80 percent the week before.
Ginnie Mae loans in forbearance dropped significantly, from 9.62 percent the previous week to 9.12 percent.
Loans in forbearance for depository servicers dropped from 7.40 percent to 7.21 percent, and loans in forbearance for independent mortgage bank (IMB) servicers declined from 7.41 percent to 7.33 percent.
Private-label securities (PLS) and portfolio loans in forbearance, on the other hand, increased from 10.43 percent to 10.71 percent.
“The beginning of September brought another drop in the share of loans in forbearance, with declines in both GSE and Ginnie Mae forbearance shares,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement. “However, at least a portion of the decline in the Ginnie Mae share was due to servicers buying delinquent loans out of pools and placing them on their portfolios. As a result of this transfer, the share of portfolio loans in forbearance increased.”
The number of forbearance requested as a percent of servicing portfolio volume rose on a weekly basis from 0.09 percent to 0.11 percent.
Currently, 33.69 percent of all loans in forbearance are in the initial forbearance plan stage, 65.35 percent are in a forbearance extension and 0.96 percent are re-entering into forbearance.
While Congress continues to be at a standstill in passing a second stimulus bill to support Americans who have become unemployed as a result of the COVID-19 pandemic, however, it’s likely forbearance rates could increase in upcoming weeks.
“With just under 1 million unemployment insurance claims still being filed every week, the lack of additional fiscal support for the unemployed could lead to even higher increases of those needing forbearance,” Fratantoni added.