MBA sees improvement in Ginnie Mae forbearance rate
The portion of mortgage loans in forbearance dipped to 0.72% in August, the Mortgage Bankers Association reported Monday.
MBA’s monthly survey revealed that the total number of loans currently in a forbearance plan dropped two basis points from 0.74% of servicers’ portfolio volume in July to 0.72% at the end of August. The trade organization estimates that 360,000 homeowners are in forbearance.
“The overall number of loans in forbearance continues to trickle down, but there was an increase in Ginnie Mae forbearances in August,” said Marina Walsh, vice president of industry analysis at MBA.
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The share of Ginnie Mae mortgages in forbearance rose to 1.32%, according to the report. Meanwhile, the percentage of Fannie Mae and Freddie Mac loans in forbearance decreased two basis points to 0.32%, and the forbearance share for portfolio loans and private-label securities (PLS) fell eight basis points to 1.26%.
“From January 2021 through May 2022, the Ginnie Mae forbearance rate was declining – albeit at a slower pace in 2022 compared to 2021,” Walsh explained. “In June and July this year, the rate stayed flat. Last month, Ginnie Mae new forbearance requests and re-entries outpaced forbearance exits, and there was a decline in post-forbearance workout performance among government loans. Despite this activity, the overall performance of the Ginnie Mae portfolio still improved to 94.57% current.”
Walsh warned that if the unemployment rate rises and the personal savings rate dwindles due to record-high inflation, pressures on portfolio performance and post-forbearance workout performance may be on the horizon – particularly for government loans.
