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Monday, November 09, 2020

MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 5.67%"

by Calculated Risk on 11/09/2020 04:00:00 PM

Note: This is as of November 1st.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 5.67%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 16 basis points from 5.83% of servicers’ portfolio volume in the prior week to 5.67% as of November 1, 2020. According to MBA’s estimate, 2.8 million homeowners are in forbearance plans.
“With declines in the share of loans in forbearance across the board, the data this week align well with the positive news from October’s jobs report, which showed a gain of more than 900,000 private sector jobs, and a 1 percentage point decrease in the unemployment rate,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “A recovering job market, coupled with a strong housing market, is providing the support needed for many homeowners to get back on their feet.”

Added Fratantoni, “However, the data continue to show that servicers are still having difficulties reaching borrowers who have reached the six-month point of their forbearance period. Servicers are required to get borrowers’ consent to extend forbearance beyond six months. Homeowners who continue to be impacted by hardships related to the pandemic should contact their servicer.”
By stage, 22.25% of total loans in forbearance are in the initial forbearance plan stage, while 75.99% are in a forbearance extension. The remaining 1.76% are forbearance re-entries.
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 few months.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) remainedunchanged relative to the prior week at 0.10%."

There hasn't been a pickup in forbearance activity related to the end of the extra unemployment benefits.