MBA expects strong job gains to increase rate of forbearance exits
The number of homeowners in forbearance plans is now below two million, according to the Mortgage Bankers Association.
As of June 27, the total number of loans now in forbearance decreased by four basis points to 3.87% of servicers’ portfolio volume in the prior week. MBA estimated that around 1.9 million homeowners remain in forbearance.
“For the first time since last March, the share of Fannie Mae and Freddie Mac loans in forbearance dropped below 2%. The share in every investor type and almost every loan category dropped as well, bringing the number of homeowners in forbearance below two million,” said Mike Fratantoni, senior vice president and chief economist at the MBA.
The share of Fannie Mae and Freddie Mac loans in forbearance slipped three basis points to 1.99%. Ginnie Mae loans in forbearance dropped from 5.13% to 5.10%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased from 7.97% to 7.92%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers and depository servicers both posted three-basis-point declines to 4% and 4.11%, respectively.
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“The rate of forbearance exits and new forbearance requests remained at low levels, but we expect the pace of exits to increase with reporting next week for the beginning of July,” Fratantoni said. “Strong job growth in June should provide a springboard for further improvements in the forbearance numbers over the next month.”
