MBA shares findings of its new survey
The share of loans in forbearance dropped by two basis points week over week to 2.23% of servicers’ portfolio volume, with both new requests and exits remaining at a slow pace.
According to the Mortgage Bankers Association, an estimated 1.6 million homeowners were in forbearance as of August 29. The majority (81.2%) of the loans in forbearance are in a forbearance extension, while 10.6% are in the initial plan stage, and 8.2% are forbearance re-entries. New requests are down from 0.05% to 0.04% over the week.
MBA chief economist Mike Fratantoni pointed out a steep decline in the percentage of Ginnie Mae loans in forbearance, down from 3.92% to 3.63%. Fannie Mae and Freddie Mac’s forbearance volumes decreased from 1.66% to 1.63%, while the share of portfolio and private-label securities (PLS) loans in forbearance increased from 7.18% to 7.52%.
“There was another large shift in the location of many FHA and VA loans, which have been bought out of Ginnie Mae pools and moved onto servicer balance sheets,” he said. “As a result, there was a sharp drop in the share of Ginnie Mae loans in forbearance and an offsetting increase in the share of portfolio loans in forbearance. These buyouts enable servicers to stop advancing principal and interest payments and work with borrowers to begin paying again before they are resecuritized into Ginnie Mae pools.”