The total number of loans now in forbearance decreased by 6 basis points, from 0.7% in December to 0.64% in January, as stated in a new report from the Mortgage Bankers Association (MBA).
According to the MBA’s latest monthly Loan Monitoring Survey, 320,000 homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance decreased by 1 basis point to 0.30%. Ginnie Mae loans in forbearance decreased 8 basis points to 1.37%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 17 basis points to 0.83%.
Key highlights:
- By stage, 36.9% of total loans in forbearance are in the initial forbearance plan stage, while 49.9% are in a forbearance extension. The remaining 13.2% are forbearance re-entries, including re-entries with extensions.
- For forbearance exits from June 2020, through January 2023, 29.6% resulted in a loan deferral/partial claim, 18.1% continued to make their monthly payments, 17.5% did not make all of their monthly payments and exited without a loss mitigation plan in place, 16.1% were in loan modification or trial loan modification, 10.9% were in reinstatements, 6.6% had loans paid off through either a refinance or by selling the home, and 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 increased from 95.69% in December to 95.86%.
- The five states with the highest share of loans that were current as a percent of servicing portfolio were Washington, Idaho, Colorado, Utah, and California.
- The five states with the lowest share of loans that were current as a percent of servicing portfolio were Louisiana, Mississippi, Indiana, West Virginia, and New York.
- 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 increased to 76.03% (from 75.92% the previous month).
Major takeaway:
“The forbearance rate decreased across all investor types in January, as borrowers continued to recover from pandemic-related hardships,” said Marina Walsh, CMB, MBA’s vice president of Industry Analysis. “With the national emergency set to end on May 11 of this year, many borrowers will no longer have the option to initiate COVID-19-related forbearance. Mortgage forbearance in other forms–whether due to natural disasters or life events–will continue, albeit with different requirements and parameters.”
For the full report, visit www.mba.org/loanmonitoring.
