The number of mortgages in forbearance fell for the sixth straight week, hitting 7.74%, according to the Mortgage Bankers Association.
The MBA’s latest Forbearance and Call Volume Survey found that the total share of loans in forbearance had dropped six basis points to 7.74% as of July 19, down from 7.8% the prior week. MBA estimated that 3.9 million homeowners are currently in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance fell to 5.49%, a 15-basis-point improvement. It was the seventh week in a row that the share of Fannie and Freddie loans in forbearance dropped. The share of Ginnie Mae loans in forbearance increased one basis point to 10.7%, while the forbearance share for portfolio loans and private-label securities spiked 12 basis points to 10.53%. The percentage of loan in forbearance for depository servicers fell to 8.06%, while the percentage of loans in forbearance for independent mortgage bank servicers rose to 7.85%.
“The share of loans in forbearance declined by a smaller amount than in previous weeks, as the pace of borrowers exiting forbearance slowed,” said Mike Fratantoni, senior vice president and chief economist for MBA. “Although the GSE portfolio of loans in forbearance should continue to improve, Ginnie Mae’s portfolio saw an uptick of both loans in forbearance and borrowers requesting forbearance. The high level of unemployment claims in recent weeks may be playing a role, as weakness would likely impact Ginnie Mae’s portfolio first.
“As a result of large buyouts from Ginnie Mae pools in recent weeks, many FHA and VA loans are now being held as portfolio loans by bank servicers,” Fratantoni said. “That is why the share of portfolio loans in forbearance has increased and is now typically at a higher level than that for Ginnie Mae loans.”