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Monday, November 21, 2022

MBA Survey: "Share of Mortgage Loans in Forbearance Increases Slightly to 0.70% in October"

by Calculated Risk on 11/21/2022 04:12:00 PM

Note: This is as of October 31st.

From the MBA: Share of Mortgage Loans in Forbearance Increases Slightly to 0.70% in October

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance increased by 1 basis point from 0.69% of servicers’ portfolio volume in the prior month to 0.70% as of October 31, 2022. According to MBA’s estimate, 350,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance increased 1 basis point to 0.31%. Ginnie Mae loans in forbearance increased 8 basis points to 1.41%, and the forbearance share for portfolio loans and private-label securities (PLS) declined 11 basis points to 1.03%.

“The overall share of loans in forbearance increased slightly in October, but it was a mixed bag by investor type. The forbearance rate for Ginnie Mae, Fannie Mae, and Freddie Mac loans increased, and there was a decline in portfolio and PLS loans in forbearance,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Several factors were behind the first monthly increase in forbearances in 29 months, including the effects of Hurricane Ian in the Southeast, the diminishing number of loans bought out of Ginnie Mae pools and placed in portfolio, and the fact that new forbearance requests have closely matched forbearance exits for the past three months.”
Added Walsh, “The overall share of loans that were current last month decreased 15 basis points to 95.70%, with 44 states reporting declines (not delinquent or in foreclosure). Florida, which was hit the hardest by Hurricane Ian, experienced a 49-basis-point drop in the share of loans that were current – the biggest decline of all states.”
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 had been decreasing, although there was a slight increase in October. At the end of October, there were about 350,000 homeowners in forbearance plans.