Number of home loans in forbearance falls below 1%
The pace of monthly forbearance exits slowed to a two-year low as the estimated number of mortgage borrowers in forbearance decreased to just 470,000 in April.
The total number of loans in forbearance fell 11 basis points from 1.05% of servicers’ portfolio volume to 0.94% as of April 30, the Mortgage Bankers Association’s latest survey results showed.
The forbearance share for Fannie Mae and Freddie Mac loans dropped six basis points to 0.43%, while the share of Ginnie Mae loans in forbearance fell nine basis points to 1.29%. Portfolio loans and private-label securities (PLS) forbearances declined 29 basis points to 2.15%
“With the number of borrowers in forbearance decreasing to less than half a million, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020,” said Marina Walsh, vice president of industry analysis at MBA. “Servicers are expected to continue making small incremental inroads to the remaining loans in forbearance.”
Additionally, the percentage of borrowers who were current on mortgage payments increased in April to 95.64%, the highest level so far this year.
“The best indicator of loan performance is overall national employment. The US unemployment rate is still below 4%, leaving borrowers in a good position to make their monthly mortgage payments,” Walsh explained.