As the job market seems to improve, many borrowers in forbearance are withdrawing from their plans
Despite an uptick in the overall share of mortgages in forbearance, the level of forbearance requests remained low in the first week of June, according to the Mortgage Bankers Association's latest survey.
"Although there continue to be layoffs, the job market does appear to be improving, and this is likely leading to many borrowers in forbearance deciding to opt out of their plan," said MBA Chief Economist Mike Fratantoni.
MBA estimated that nearly 4.3 million home owners are now in forbearance programs, with the overall share of mortgages in forbearance increased from 8.53% to 8.55%. The uptick was driven by a bigger increase in the share of portfolio and private-label securities (PLS) loans in forbearance, according to Fratantoni.
By investor type, the share of Fannie Mae and Freddie Mac loans in forbearance inched down by two basis points to 6.38%. Ginnie Mae loans in forbearance stayed unchanged at a share of 11.83%, while the percentage of portfolio loans and PLS in forbearance rose to 10.18%. Similarly, the forbearance share for depository servicers climbed to 9.24%, and the percentage of loans in forbearance for independent mortgage bank (IMB) servicers grew to 8.43%.
"With June mortgage payments due, servicers did report the first increase in forbearance requests in two months," Fratantoni said. "The level of forbearance requests is still quite low, but there was a noticeable increase in call volume over the course of the week."
