Forbearance numbers show “unevenness of the current economic recovery,” expert says
The total number of mortgages in forbearance fell by two basis points from the prior week to 5.92% of servicers’ portfolio volume as of Oct. 18, according to new data from the Mortgage Bankers Association. According to the MBA’s estimate, 3 million homeowners are currently in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 20th week in a row, falling five basis points to 3.72%. The share of Ginnie Mae loans in forbearance increased three basis points to 8.17%, and the forbearance share for portfolio loans and private-label securities rose four basis points to 8.9%. The percentage of loans in forbearance for independent mortgage bank servicers rose two basis points to 6.35%, while the share of loans in forbearance for depository servicers fell seven basis points to 5.86%.
“The share of loans in forbearance declined only slightly in the prior week, after two weeks of a flurry of borrowers exiting as they reached the six-month mark,” said Mike Farantoni, MBA senior vice president and chief economist. “There continues to be a steady improvement for Fannie Mae and Freddie Mac loans, but the forbearance share for Ginnie Mae, portfolio and PLS loans all increased. This is further evidence of the unevenness of the current economic recovery. The housing market is booming, as shown by the extremely strong pace of home sales last week. However, many homeowners continue to struggle, as the pace of the job market’s improvement has waned.”