The number of mortgage loans in forbearance reached 0.55% in March 2023, a month-over-month drop of 5 basis points from the previous month’s 0.60%. That’s according to the latest monthly Loan Monitoring Survey, conducted by the Mortgage Bankers Association (MBA).
This drop means that a total of 275,000 homeowners are in forbearance plans.
Key details
- The share of Ginnie Mae loans in forbearance decreased month over month from 1.28% to 1.18%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased month over month from 0.28% to 0.26%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased month over month from 0.78% to 0.68%.
- 0.74% of loans are in Independent Mortgage Banks (IMBs); the previous month this was 0.81%.
- 0.36% of loans are in Depositories; the previous month this was 0.40%.
- 33.8% of total loans in forbearance are in the initial forbearance plan stage.
- 52.9% are in a forbearance extension.
- The remaining 13.3% are forbearance re-entries, including re-entries with extensions.
- Of the cumulative forbearance exits from June 1, 2020 through March 31, 2023:
- 29.6% resulted in a loan deferral/partial claim.
- 18.0% represented borrowers who continued to make their monthly payments during their forbearance period.
- 17.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
- 16.1% resulted in a loan modification or trial loan modification.
- 10.9% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
- 6.5% resulted in loans paid off through either a refinance or by selling the home.
- The remaining 1.2% resulted in 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 to 96.35% in March 2023 from 95.76% in February 2023 (on a non-seasonally adjusted basis).
- The five states with the highest share of current loans representing a percent of servicing portfolio: Washington, Idaho, Colorado, Utah, and California.
- The five states with the lowest share of current loans representing a percent of servicing portfolio: Louisiana, Mississippi, New York, Oklahoma, and West Virginia.
- Total completed loan workouts (repayment plans, loan deferrals/partial claims, loan modifications) from 2020 and onward that were current increased from 76% to 76.70% in March.
The takeaway
“As the COVID-19 national emergency draws to a close, the number of loans in forbearance continues to drop,” said Marina Walsh, CMB, MBA’s vice president of Industry Analysis. “Mortgage performance remains strong with the percentage of borrowers who were current on their mortgage payments and post-forbearance workouts increasing in March. MBA’s forecast still calls for a recession in 2023, which may change the current performance levels, but credit quality is generally good and many borrowers facing financial hardship can now access enhanced loss mitigation options that resulted from successes of pandemic-related policies.”
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