MBA reveals latest data
The mortgage forbearance rate remained virtually unchanged in July as the number of loans entering forbearance was almost on the same level as the loans exiting plans.
The Mortgage Bankers Association estimated that 370,000 homeowners are currently in forbearance plans, down seven basis points to 0.74% in July from 0.81% of servicers’ portfolio volume in June.
According to Marina Walsh, MBA’s vice president of industry analysis, the slight drop was driven by a decline in the forbearance share for portfolio loans and private-label securities (PLS), which fell 34 basis points to 1.34%.
“July continued the ongoing trend in recent months of most of the forbearance exits coming from borrowers with portfolio loans and private label security loans,” Walsh said.
Meanwhile, the share of Fannie Mae and Freddie Mac loans in forbearance inched down one basis point to 0.34%. Ginnie Mae loans in forbearance held steady at 1.26%
“There has been very little change in the forbearance rate for Fannie Mae, Freddie Mac, and Ginnie Mae loans during the past three months, perhaps indicating that we have reached a floor, with loans entering forbearance about equal to loans exiting forbearance for these loan types,” said Walsh.
As for delinquencies, CoreLogic reported that the overall mortgage delinquency rate declined for the 14th consecutive month on an annual basis to 2.7% in May – the lowest level recorded since January 1999.
“Early-state mortgage delinquencies are at a generational low supported by a strong labor market,” said Molly Boesel, principal economist at CoreLogic. “Furthermore, serious delinquencies have declined to where they were in early 2020. While the foreclosure rate remains low, about half of serious delinquencies are from mortgages that are six months or more past due. This suggests that there could be small increases in the foreclosure rate later this year.”