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Monday, July 18, 2022

MBA Survey: "Share of Mortgage Loans in Forbearance Decreases Slightly to 0.81% in June"

by Calculated Risk on 7/18/2022 04:00:00 PM

Note: This is as of June 30th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases Slightly to 0.81% in June

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 4 basis points from 0.85% of servicers’ portfolio volume in the prior month to 0.81% as of June 30, 2022. According to MBA’s estimate, 405,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 0.35%. Ginnie Mae loans in forbearance increased 1 basis point to 1.26%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 18 basis points to 1.68%.

“The overall forbearance rate in June stayed relatively flat with just a 4-basis-point decline from May,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Borrowers continue to exit forbearance, but at a much slower pace than six or nine months ago. New forbearance requests are still trickling in, as permitted under the CARES Act, resulting in very little movement in the overall percentage of loans in forbearance.”

Added Walsh, “There are some early indicators of borrower stress resulting from high inflation and rising interest rates, among other factors. For example, overall servicing portfolio performance dropped by 14 basis points to 95.71% current in June, and the performance of post-forbearance workouts declined by 140 basis points to 81.34%. It is worth monitoring post-forbearance workouts for all borrowers, and particularly for borrowers with government loans, who are typically the most vulnerable to economic slowdowns.”
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 share of forbearance plans is decreasing, and, at the end of June, there were about 405,000 homeowners in forbearance plans.