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The total number of mortgage loans in forbearance dropped 3 basis points from 5.23 percent of servicers’ portfolio volume the week before to 5.20 percent during the week ending Feb. 28, 2021, according to the Mortgage Bankers Association’s (MBA) most recent Forbearance and Call Volume Survey.
There are now approximately 2.6 million homeowners enrolled in forbearance plans, according to the MBA’s estimates.
The overall decline in loans in forbearance was led by Ginnie Mae loans, which dropped by 7 basis points from the previous week to 7.28 percent of loans in forbearance. Following Ginnie Mae, loans in forbearance for independent mortgage bank (IMB) servicers took the second greatest decline, dropping by 6 basis points to 5.51 percent.
Fannie Mae and Freddie Mac loans in forbearance also declined, by 3 basis points to 2.94 percent. Meanwhile, loans in forbearance for depository servicers decreased 1 basis point to 5.28 percent.
Loans in forbearance for portfolio loans and private-label securities (PLS) were the only group of loans that increased in size, by 2 basis points to 9.05 percent.
Mike Fratantoni, MBA’s senior vice president and chief economist, noted that forbearance numbers — while they’ve generally been declining for months — stand to be impacted at an even greater level in upcoming months as the economy continues to see improvement and many homeowners come up on their 1-year anniversary of being in forbearance.
“There was a small decline in the total share of loans in forbearance in the last week of February, as the pace of forbearance exits increased,” Fratantoni said in a statement. “This continues the trend reported in prior months. Of those homeowners in forbearance, more than 12 percent were current at the end of February, down somewhat from the almost 14 percent at the end of January.”
“The improving economy, the soon-to-be passed stimulus package, and the many homeowners in forbearance reaching the 12-month mark of their plan could all influence the overall forbearance share in the coming months,” he added.
During the survey period, only 14.6 percent of loans in forbearance were in the initial forbearance plan stage, 82.8 percent were in a forbearance extension, and 2.6 percent were forbearance re-entries.