Monday, August 03, 2020

MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 7.67%" of Portfolio Volume

by Calculated Risk on 8/03/2020 04:00:00 PM

Note: This is as of July 26th.  The report next week (through Aug 2nd) might show some impact from the delay of the disaster relief package.

From the MBA: Share of Mortgage Loans in Forbearance Decreases for Seventh Straight Week to 7.67%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 7 basis points from 7.74% of servicers’ portfolio volume in the prior week to 7.67% as of July 26, 2020. According to MBA’s estimate, 3.8 million homeowners are in forbearance plans.
...
“The share of loans in forbearance declined, but we are now seeing a notable pattern developing over the past two weeks. The forbearance share is decreasing for GSE loans but has slightly increased for Ginnie Mae loans,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The job market has cooled somewhat over the past few weeks, with layoffs increasing and other indications that the economic rebound may be losing some steam because of the rising COVID-19 cases throughout the country. It is therefore not surprising to see this situation first impact the Ginnie Mae segment of the market.”

Added Fratantoni, “The higher level of Ginnie Mae loans in forbearance will increase the amount of payments that servicers must advance. We continue to monitor servicer liquidity during these challenging times.”
emphasis added
MBA Forbearance Survey Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April, and has been trending down for the last seven weeks.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week from 0.13% to 0.10% – the lowest level reported since early March."