Mortgage forbearance rates improve despite higher delinquencies

Mortgage forbearances were down across the board in February, with the total number of loans currently in forbearance plans declining four basis points from January, according to the Mortgage Bankers Association.

MBA reported Monday that 300,000 homeowners are in forbearance plans, representing 0.60% of servicers’ portfolio volume as of February 28. The improvement comes as the national delinquency rate jumped 51 basis points to 3.69% in the fourth quarter of 2022.

“The February results on mortgage performance is welcome news, given recent increases in delinquencies for other credit types such as credit cards and auto loans,” said Marina Walsh, MBA’s vice president of industry analysis. “However, with the possibility of a recession this year, we may see some deterioration in performance – particularly for government loans.”