The number of forbidden loans drops by 34 basis points

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The latest Mortgage Bankers Association (MBA) forbearance and call volume survey shows that the total number of loans currently in forbearance fell by 34 basis points from 2.62% of portfolio volume to agents the week before at 2.28% as of October 10. 2021.

The MBA now estimates that about 1.1 million US homeowners are in forbearance plans.

By type, the share of Fannie Mae and Freddie Mac (GSE) loans in forbearance fell 16 basis points from 1.21% to 1.05%. Forborne Ginnie Mae loans fell 17 basis points from 2.94% to 2.77%, and the forborne share of portfolio lending and private label (PLS) securities fell by 108 basis points, from 6.42% to 5.34%. The percentage of loans in forbearance for independent mortgage bank (IMB) services decreased by 25 basis points from the previous week to 2.57%, and the percentage of loans in forbearance for depository services decreased by 53 basis points at 2.16%.

By stage, 14.8% of the total forbearance loans were at the initial stage of the forbearance plan, while 75.5% were in extension forbearance. The remaining 9.7% represented income from abstention.

“Abstention outflows continued at an even faster pace, leading to a 34 basis point drop in the overall abstention rate. The decline was apparent across all types of services and investors, ”said Mike Fratantoni, senior vice president and chief economist of MBA. “There has been a substantial drop of more than a percentage point in the forbearance rate for portfolio loans and PLSs, which includes loans held for investment, loans managed for private investors and government loans that have been purchased from Ginnie Mae Pools for the purpose of modifying them and then re-securing them in Ginnie Mae Pools. ”

Among the cumulative withdrawals from abstention for the period from June 1, 2020 to October 10, 2021, at the time of the withdrawal from abstention:

  • 28.9% resulted in a loan deferral / partial claim.
  • 20.8% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 16.7% represented borrowers who had not made all of their monthly payments and walked out of forbearance without a loss mitigation plan in place yet.
  • 12.9% resulted in a loan modification or a trial loan modification.
  • 12.2% resulted in reinstatements, in which the overdue amounts are reimbursed upon termination of the abstention.
  • 7.1% resulted in loans being repaid either by refinancing or by selling the house.
  • The remaining 1.4% resulted in redemption plans, short sales, acts in lieu or other reasons.

“We have now fallen to 1.1 million forbearance owners, up from a peak of 4.3 million owners in June 2020,” said Fratantoni. “A positive job and salary outlook, continued appreciation in home prices, and the availability of several loan financing options are factors that will help many homeowners transition to forbearance.”

The contribution to the number of homeowners coming out of forbearance was welcome news from the US Department of Labor, which reported that for the week ending October 9, the anticipated figure for seasonally adjusted initial jobless claims was 293,000, or a decrease of 36,000 from the revised level of the previous week. , marking the lowest level of initial claims since March 14, 2020, when they stood at 256,000.

In terms of provider call center weekly volume, calls decreased from the previous week, from 7.8% to 7.4%, with the average response speed dropping from 2.5 minutes to 2, 6 minutes, average call duration dropping from 8.4 minutes to 8.3 minutes. .

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