Borrowers continued to exit from forbearance plans last week.
Forbearance Numbers Down to 3% of Servicing Volume
The latest number of mortgages remaining in forbearance plans, according to the Mortgage Bankers Association (MBA), came in at just 3% of all serviced loans for the period of September 6 to September 12. This 3% represents an eight-basis point drop from 3.08% the previous week.
The MBA estimates there are approximately 1.5M borrowers currently in forbearance plans.
Mike Fratantoni, the MBA’s senior vice president and chief economist, said. “20% of loans in forbearance are either new forbearance requests or re-entries. At this point, borrowers in forbearance extensions are exiting at a faster rate as they near – or reach – the expiration of their maximum forbearance term.”
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Loans in Forbearance Plans By Forbearance Stages
Among current forbearance-plan borrowers,
- 11.3% are in their initial stage of forbearance
- 8.5% are in the re-entry stage of forbearance
- 80.2% remain in their extension stage of forbearance
Thanks to the passage of the CARES Act by Congress in 2020, millions of borrowers entered COVID-related forbearance plans in March of that year. Two six-month extensions were passed in subsequent legislation. The first wave of borrowers in COVID-forbearance is now approaching the end of their 18-month protections.
Forbearance Numbers for Distressed Borrowers with Portfolio and/or Private-Label Loans
Here’s a look at where forbearance numbers stand that were not covered by the federal COVID-forbearance relief mandate:
- Portfolio & PLS Loans dropped to 6.95% in the week ending September 12
- Fannie Mae and Freddie Mac conventional mortgages dropped for a 1.47% share of volume at GSEs
- Ginnie Mae-backed mortgages in forbearance posted 3.39%
Results of Distressed Borrowers
What happened with the distressed borrowers who had exited their forbearance plans between 6/1/20 and 9/12/21?
- 28.6% ended up in deferral or partial claim
- 21.9% made regular payments while in forbearance
- 416.% exited without loss mitigation plan in place
- 12.7% were reinstatements
- 11.6% had loan modifications
- 7.4% either refinanced or sold property
- 1.4% exited in repayment plans, short sales of deed-in-lieu
Thanks to the Mortgage Bankers Association and National Mortgage News.
