October 19, 2021

MP Now News

Mortgage News

Mortgage Forbearance Volume Drops to 18-Month Low

the latest survey on forbearance and call volume issued by the Mortgage Bankers Association (MBA) found that the total number of now tolerated loans fell by four basis points from 3.00% of the servicer’s portfolio size in the previous week to 2.96%. According to MBA estimates, there are currently around 1.5 million homeowners on deferral plans.

The share of the Fannie Mae and Freddie Mac (GSE) loans in the forbearance decreased by three basis points from 1.47% to 1.44%. Ginnie Mae’s deferred loans increased three basis points from 3.39% to 3.42% and the deferral rate on portfolio loans and private label securities (PLS) decreased four basis points from 6.95% to 6.91%. The deferred mortgage loan percentage for independent mortgage lender (IMB) service providers decreased one basis point from the previous week to 3.24% and the deferred loan percentage for custodian service providers decreased four basis points to 3.06%.

“The proportion of loans in the forbearance fell further last week and fell below 3% for the first time since March 2020,” said Mike Fratantoni, SVP and chief economist of the MBA. “However, there has been a slight increase in the deferral rate for Ginnie Mae loans, and that increase has been seen for both custodians and IMF service providers. New forbearance requests and re-admissions continue to run at higher rates on Ginnie Mae loans than portfolio and PLS loans, which include many delinquent FHA, VA and USDA loans bought from Ginnie Mae pools. “

By stage, 12% of total deferral loans are in the initial deferral plan phase, while 79.3% were in a deferral extension. The remaining 8.7% were defined as forbearance re-entries.

“As forecast, we broke through the three percent threshold as forecast – an important milestone,” said Matt Tully, SVP of Agency Affairs and Chief Compliance Officer Sagent. “However, Ginnie Mae and PLS numbers are rising, a potentially worrying trend that shows we are not quite out of the woods yet. On the positive side, the percentage of borrowers who get out without a plan is now below 10%. This one Data signals that borrowers are more directly in touch with their servicer regarding post-placement options. “

Of the cumulative forbearance exits for the period from June 1, 2020 to September 19, 2021 at the time of the forbearance exit:

  • 28.7% led to a loan deferral / partial claim.
  • 21.8% represented borrowers who continued their monthly payments during their deferral period.
  • 16.3% represented borrowers who did not make all of their monthly payments and ended the forbearance without a loss mitigation plan still in place.
  • 12.7% resulted in reinstatements where overdue amounts are repaid upon expiry of the deferral.
  • 11.8% resulted in a loan change or a trial loan change.
  • 7.4% resulted in loans being paid off either by refinancing or by selling the home.
  • The remaining 1.4% resulted from repayment plans, short sales, replacement contracts or other reasons.

Servicer call centers reported that the volume increased from 6.3% to 7.9% compared to the previous week, with the average call duration decreasing slightly from 8.3 minutes to 8.2 minutes.