Report shows stagnant numbers, but underlying trends remain complex
The number of homeowners seeking relief through mortgage forbearance programs has remained stagnant for the first four months of 2024, according to the latest data from the Mortgage Bankers Association (MBA).
The share of loans in forbearance held steady at 0.22% in April, unchanged from previous months this year.
The MBA estimates that approximately 110,000 homeowners are currently enrolled in forbearance plans, a figure that has remained relatively consistent throughout the first quarter. Since the onset of the pandemic in March 2020, mortgage servicers have extended forbearance to a staggering 8.1 million borrowers.
The share of Fannie Mae and Freddie Mac loans in forbearance dipped to 0.11%, while Ginnie Mae loans saw a slight decline to 0.39%. Forbearance for portfolio loans and private-label securities remained unchanged at 0.31%.
“While forbearance is still a viable option for homeowners needing temporary mortgage payment relief, its usage has diminished without a major natural disaster or labor market downturn,” Marina Walsh, vice president of industry analysis at MBA, said in the report.
The majority of borrowers in forbearance (71.1%) cited temporary hardships like job loss, death, divorce, or disability as the reason for seeking relief. COVID-19-related forbearances accounted for 11.5% of cases, while another 11.4% were due to natural disasters.
The survey also tracked the progress of borrowers exiting forbearance. As of April, 75.86% of total completed loan workouts were current, including repayment plans, loan deferrals, and loan modifications. This suggests that most borrowers who exit forbearance are able to successfully resume regular mortgage payments.
Read next: MBA: Mixed trends in mortgage delinquencies for Q1 2024
The share of serviced loans that were current (not delinquent or in foreclosure) showed a slight improvement, rising to 96.09% in April, up 17 basis points from March.
“The performance of servicing portfolios and post-forbearance workouts remains strong, despite some fluctuations from month to month,” Walsh said.
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