According to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey, the total number of loans currently in forbearance has decreased for the first time since the survey’s inception in March. Forbearance rates as of June 14 are now at 8.48 percent, a drop from the previous week’s 8.55 percent. This leaves 4.2 million homeowners in forbearance plans, down from the previous week’s 4.3 million.
This is the second consecutive drop WoW for Fannie Mae and Freddie Mac loans in forbearance, which decreased to 6.31 percent—a 7-basis-point improvement. According to MBA, the forbearance shares for portfolio loans and private-label securities (PLS) declined by 19 basis points to 9.99 percent. Meanwhile, Ginnie Mae loans in forbearance remained flat for the third week at 11.83 percent. The percentage of loans in forbearance for depository servicers dropped to 9.15 percent, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased to 8.40 percent.
“The lower share of loans in forbearance was led by declines in GSE and portfolio and PLS loans, as more of those borrowers exited than entered a new forbearance plan,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Fewer homeowners in forbearance underscores the continued improvements in the job market, and provides another sign of the fundamental health of the housing market, which has rebounded considerably over the past several weeks.”
Added Fratantoni, “The big unknown with respect to this positive development is the extent to which it relies upon policy measures put in place to help families through this crisis, particularly the stimulus payments and enhanced unemployment insurance benefits that were key parts of the CARES Act. We expect to see further improvements in the weeks ahead given the drop in forbearance requests this week.”
Source: Mortgage Bankers Association