Real Estate

Mortgage Forbearances Continue Slow Decline – Inman News

Mortgage forbearances decreased slightly this week as more homeowners continue to slowly exit forbearance. 

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by one basis point from 4.5 percent of servicers’ portfolio volume in the prior week to 4.49 percent as of April 18, 2021. This marks the eighth consecutive week of declines. According to MBA’s estimate, 2.25 million homeowners are now in forbearance plans.

“After two weeks of large declines, the share of loans in forbearance decreased for the eighth straight week, but by only one basis point,” said Mike Fratantoni, MBA senior vice president and chief economist. “New forbearance requests increased, and the rate of exits declined. More than 40 percent of borrowers in forbearance extensions have now exceeded the 12-month mark.”

The share of Fannie Mae and Freddie Mac forbearances remained the same relative to the prior week at 2.44 percent. Ginnie Mae loans in forbearance decreased seven basis points to 6.09 percent, down from 6.16 percent, while the forbearance share for portfolio loans and private-label securities increased by eight basis points to 8.42 percent, up from 8.34 percent the week before. 

The percentage of loans in forbearance for independent mortgage bank servicers remained the same relative to the prior week at 4.72 percent, and the percentage of loans in forbearance for depository servicers declined three basis points to 4.64 percent.

By stage, 12.9 percent of total loans in forbearance are in the initial forbearance plan stage, while 82.4 percent are in a forbearance extension. The remaining 4.7 percent are forbearance re-entries.

The mortgage delinquency rate dropped 16.4 percent from 6 percent in February to 5.02 percent in March, according to the latest Black Knight First Look data report. For comparison, over the past 20 years, delinquencies have declined an average of 10 percent in March.

Email Kelsey Ramirez

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