But MBA chief economist says it’s typical at this time of the month
After two weeks of rapid declines, the total number of loans in forbearance dropped again – but at a slower pace.
The latest survey released by the Mortgage Bankers Association showed that forbearances fell seven basis points to 2.21% of servicers’ portfolio volume as of October 17, from 2.28% the previous week. MBA estimates that 1.1 million borrowers are still in forbearance.
By stage, 15.3% of total loans in forbearance are in the initial forbearance plan stage, while 74.8% are in a forbearance extension. The remaining 9.9% are forbearance re-entries.
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“As reported in the past, many servicers process forbearance exits at the beginning of the month, therefore it is not surprising to see the pace of exits slow again mid-month,” said MBA chief economist Mike Fratantoni. “The composition of loans in forbearance is evolving. More than 25% of loans in forbearance are now made up of new forbearance requests and re-entries, while many other homeowners who have reached the end of 18-month terms are successfully exiting into deferrals or modifications.”
By investor type, the share of Fannie Mae and Freddie Mac loans in forbearance was down by five basis points to 1%. Ginnie Mae loans in forbearance also decreased five basis points to 2.72%. The percentage of portfolio loans and private-label securities in forbearance decreased by 13 basis points to 5.21% week over week.
