The total share of loans in forbearance fell for the fourth consecutive week, dropping below 5% for the first time in a year, according to data from the Mortgage Bankers Association.
MBA’s latest estimate revealed that forbearance rates inched down from 5.05% of servicers’ portfolio volume to 4.96% as of March 21. That represents 2.5 million homeowners who are currently in some kind of forbearance plan.
“New forbearance requests remained at their lowest level since last March, and the pace of exits increased,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “More than 17% of borrowers in forbearance extensions have now exceeded the 12-month mark.”
By investor type, the share of Fannie Mae and Freddie Mac loans in forbearance dipped six basis points to 2.77%. Ginnie Mae loans in forbearance were down 20 basis points to 6.83%, while the share of portfolio loans and private-label securities (PLS) decreased by one basis point to 8.90%. Independent mortgage bank (IMB) servicers posted a 14-basis point drop in their percentage of loans in forbearance, down to 5.23%, and depository servicers saw their share declined five basis points to 5.10%.
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“Many homeowners need this support, even as there are increasing signs that the pace of economic activity is picking up as the vaccine rollout continues,” Frantatoni said. “Those who have an ongoing hardship due to the pandemic and want to extend their forbearance beyond the 12-month point need to contact their servicer. Servicers cannot automatically extend forbearance terms without the borrower’s consent.”
• By stage, 13.8% of total loans in forbearance are in the initial forbearance plan stage, while 83.4% are in a forbearance extension. The remaining 2.8% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume remained flat relative to the prior week at 0.05%, the lowest level since the week ending March 15, 2020.
• Of the cumulative forbearance exits for the period from June 1, 2020, through March 21, 2021: