"It has been a remarkable recovery for many homeowners in less than two years"
The Mortgage Bankers Association recorded another month of lower forbearance rates and a higher share of overall loans and forbearance-related workout loans that are current in March.
Nationwide, forbearance rates fell by 13 basis points month over month to 1.5% of servicers’ portfolio volume, bringing the estimated number of US homeowners currently in forbearance plans down to 525,000.
“The share of loans in forbearance continues to dwindle and is just five basis points shy of hitting 1% - or 500,000 homeowners - after peaking at 4.3 million borrowers in June 2020,” said Marina Walsh, vice president of industry analysis at MBA. “It has been a remarkable recovery for many homeowners in less than two years.”
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The share of Fannie Mae and Freddie Mac loans in forbearance posted a seven-basis-point decrease to 0.49%, and Ginnie Mae loans saw a 12-basis-point decline to 1.38%. The forbearance share for portfolio loans and private-label securities (PLS) was down 28 basis points to 2.44% in March.
By stage, roughly 30% of total loans in forbearance are in the initial forbearance plan stage, while 57.2% are in a forbearance extension. The remaining 13.1% are forbearance re-entries, including re-entries with extensions.
Total completed loan workouts from 2020 and onward (repayment plans, loan deferrals/partial claims, loan modifications) that were current grew from 82.3% in February to 83.7% in March.
