Mortgage News - Forbearance Volume For Servicers Reaches Three-Year Low

Forbearance Volume For Servicers Reaches Three-Year Low

Mortgage News June 29, 2023

According to the Mortgage Bankers Association (MBA) Loan Monitoring Survey conducted in May 2023, the proportion of loans under forbearance has slightly decreased. The survey indicated that the percentage dropped by two basis points, going from 0.51% of the servicers’ portfolio volume in the previous month to 0.49% as of May 31, 2023.

According to the estimates by the MBA, around 245,000 homeowners are currently enrolled in forbearance plans. Additionally, it is reported that servicers have offered forbearance options to approximately 7.9 million borrowers since March 2020.

In terms of loan types, the percentage of Fannie Mae and Freddie Mac (GSE) loans under forbearance witnessed a decrease of one basis point, declining from 0.24% to 0.23%. Similarly, Ginnie Mae loans in forbearance experienced a drop of five basis points, decreasing from 1.11% to 1.06%. The percentage of forbearance for portfolio loans and private-label securities (PLS) saw a decline of three basis points, dropping from 0.61% to 0.58%.

When considering loan stages, the most recent data indicates that 34.9% of the total loans in forbearance were in the initial forbearance plan stage, while 52.6% were in a stage of forbearance extension. The remaining 12.5% consisted of borrowers who had re-entered forbearance, including those who re-entered with an extension. Furthermore, the percentage of loans being serviced that were current (not delinquent or in foreclosure) increased from 95.89% in April 2023 to 96.12% in May 2023, based on a non-seasonally adjusted basis.

The percentage of total completed loan workouts from 2020 onwards (including repayment plans, loan deferrals/partial claims, and loan modifications) that were considered current increased to 74.93% in May, showing an improvement from the previous month’s figure of 74.39%.

According to the U.S. Department of Labor (DOL), the seasonally adjusted initial unemployment claims for the week ending June 10 remained unchanged at 262,000 compared to the previous week. The four-week moving average increased by 9,250 to 246,750, the highest level since November 20, 2021. There was no change in the insured unemployment rate, which remained steady at 1.2% for the week ending June 3.

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Forbearance Volume For Servicers Reaches Three-Year Low

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