Pressure is mounting as COVID-19 continues ravaging the economy
A survey conducted by Mortgage Bankers Association found significant increases in both forbearance and call center activity throughout the U.S. from March 30 through April 5.
In the first of what is intended to be a series of weekly surveys, MBA collected data from 53 participating servicers that includes data on 26.9 million loans serviced as of April 5 – almost 54% of the first mortgage servicing market.
The results of the survey were neither positive nor surprising.
Of the total sample, the percentage of loans in forbearance was 3.74% as of April 5, up from 2.73% on April 1. The banks saw their percentage of loans in forbearance increase from 2.24% to 3.63%, while that of IMBs rose from 3.45% to 4.17%.
The survey also looked at the country’s largest investors in the space. The percentage of loans in forbearance at Ginnie Mae rose from 4.31% to 5.89% in the course of a week. Fannie and Freddie’s forbearance percentage rose less sharply, from 1.69% to 2.44%.
The digits may be small, but the level of growth they represent is somewhat staggering. The 1.01% increase in the total number of loans in forbearance is itself a 37% increase over the 2.73% starting point. The 1.39% increase in the bank sample translates to a 53.1% increase over the previous week’s level.
“It does not surprise me,” says Teresa Tims of TDR Mortgage and Real Estate. “I actually thought [the increase] would be higher.”
Inevitably, it will be.
“With mitigation efforts seemingly in place for at least several more weeks, job losses will continue and the number of borrowers asking for forbearance will likely continue to rise at a rapid pace,” said Mike Fratantoni, MBA’s senior vice president and chief economist, in a statement accompanying the survey’s release.
MBA also shared data on forbearance requests and call center volume for the same period. Weekly forbearance requests as a percentage of servicing portfolio volume hit 2.43% on April 5, up from 1.36% on April 1. Weekly call center volume as a percentage of servicing portfolio volume rose almost 3% to 14.4%.
There was some good news: The average time it took for calls to get answered by call center employees dropped significantly, from 13 minutes to 10.3, and the abandonment rates of these calls dropped by about a fifth to 17%, two developments Fratantoni says indicate that “the mortgage industry is adapting to the current environment”.
