September 17, 2021

MP Now News

Mortgage News

Forbearance exits jump to a high not seen since March

Forbearance exits jumped to highs not seen since March, outweighing a slight surge in new applications and re-entries, according to the latest weekly report from the Mortgage Bankers Association.

As a percentage of the servicer’s portfolio volume, exits increased 15 basis points to 3.08%, new inquiries increased from 0.04% to 0.05% and call center activity increased from 5.58% in the previous week to 7.7% .

The figures for the period from August 30th to September 5th indicate a trend in which pandemic-related payment suspensions are staging always steeper decreases on a net basis since Expiration dates are approaching although the number of new borrowers applying for deferral plans is steadily increasing.

“We expect a similarly fast pace of exits in the coming weeks, which should lead to increased call volume and a further decline in forbearance stock,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association, in a press release.

Despite the net decrease in forbearance, other statistics point to capacity bottlenecks in call centers due to new inquiries. The average response speed increased from one minute to 1.6 minutes, the abandonment rates increased from 3.3% to 4% and the processing times increased from 8.1 minutes to 8.2 minutes.

The forbearance rates for non-custodians remained slightly higher at 3.33% compared to 3.49% than for the banks in the MBA survey, which recorded a decrease from 3.33% to 3.15%.

The forbearance rate for loans in Ginnie Mae securitisations fell from 3.63% to 3.39% and Fannie Mae and Freddie Mac loans from 1.63% to 1.52%. Other loans, a category that includes privately securitized and portfolio products, decreased from 7.52% to 7.27%.

The MBA data reflects reports from 24 independent mortgage lenders, 21 custodians and two subservicers.