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Tuesday, February 22, 2022

MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 1.30% in January"

by Calculated Risk on 2/22/2022 04:00:00 PM

Note: This is as of January 31st.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 1.30% in January

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 11 basis points from 1.41% of servicers’ portfolio volume in the prior month to 1.30% as of January 31, 2022. According to MBA’s estimate, 650,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 4 basis points to 0.68%. Ginnie Mae loans in forbearance decreased 3 basis points to 1.60%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 41 basis points to 3.02%.

“For the second straight month, the pace of forbearance exits reached another low since MBA began tracking exits in June 2020,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “There was also a pick-up in new forbearance requests and re-entries for all loans, and particularly for Ginnie Mae loans. Even though the forbearance rate continued its downward trajectory, it was the smallest monthly decline since January 2021.”

Added Walsh, “The positive news is that the percentage of borrowers who were current on their mortgage payments increased from December 2021. However, there was some deterioration in the performance of borrowers with existing loan workouts. Borrowers in loan workouts may have experienced new life events unrelated to the pandemic, or alternatively, the omicron variant may have triggered or re-triggered employment, health, or other stresses.”
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.  The number of forbearance plans is decreasing.