Despite the decrease, MBA warns that homeowners still face challenges
The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed a decline in the number of loans in forbearance as borrowers continued to recover from pandemic-related hardships.
According to the report, the total number of loans in forbearance fell from 0.70% to 0.64% at the end of January, representing a decrease of six basis points from the previous month. MBA estimates that 320,000 homeowners are still in forbearance plans.
Marina Walsh, MBA’s vice president of industry analysis, noted that borrowers are continuing to recover from pandemic-related hardships, leading to the decrease in forbearance rates.
The decline in forbearance was observed across all investor types, with Ginnie Mae loans experiencing an eight-basis-point decrease to 1.37%. The share of Fannie Mae and Freddie Mac loans in forbearance dropped one basis point to 0.30%, and the forbearance rate for portfolio loans and private-label securities decreased 17 basis points to 0.83%.
However, Walsh said, “With the national emergency set to end on May 11 of this year, many borrowers will no longer have the option to initiate COVID-19-related forbearance. Mortgage forbearance in other forms – whether due to natural disasters or life events – will continue, albeit with different requirements and parameters.”
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