The total number of loans now in forbearance increased by 1 basis point from 0.69% to 0.7% as of October 2022, as stated in a new report from the Mortgage Bankers Association (MBA).
According to MBA’s monthly Loan Monitoring Survey, 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%.
Key highlights:
- By stage, 36.7% of total loans in forbearance are in the initial forbearance plan stage, 50.9% are in a forbearance extension, and 12.4% are forbearance re-entries, including re-entries with extensions.
- For forbearance exits from June 2020 through October 2022, 29.6% resulted in a loan deferral/partial claim, 18.3% continued to make their monthly payments, 17.3% did not make all of their monthly payments and exited without a loss mitigation plan in place, 16% were in loan modification or trial loan modification, 11% were in reinstatements, 6.6% had loans paid off through either a refinance or by selling the home, and the remaining 1.2% had repayment plans, short sales, deed-in-lieus or other reasons.
- Total loans serviced that were current (not delinquent or in foreclosure) as a percent of servicing portfolio volume decreased from 95.85% in September to 95.7% in October (on a non-seasonally adjusted basis).
- The five states with the highest share of loans that were current as a percent of servicing portfolio: Washington, Idaho, Colorado, Utah, and Oregon.
- The five states with the lowest share of loans that were current as a percent of servicing portfolio: Mississippi, Louisiana, New York, West Virginia, and Indiana.
- The share of loans that were current declined in 44 states compared to the previous month. Of these states, Florida posted the largest monthly decline, dropping 49 basis points from 95.84% last month to 95.35% in October.
- Total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/partial claims, loan modifications) that were current as a percent of total completed workouts decreased to 78.16% in October from 78.7% the previous month.
Major takeaway:
“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, 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 95.7%, 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.”
For the full report, visit www.mba.org/loanmonitoring.
