Around 3.2 million homeowners are in forbearance plans, according to the MBA’s Forbearance and Call Volume Survey
The share of mortgages in COVID-19-related forbearance plans fell to 6.32% of servicers’ portfolio volume during the week ended Oct. 4, down from 6.81% the previous week, according to the US’ Mortgage Bankers Association’s (MBA) Forbearance and Call Volume Survey.
Roughly 3.2 million homeowners are in forbearance plans, according to the MBA’s data.
The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 18th week in a row to 4.03% – a 36-basis-point improvement.
Ginnie Mae loans in forbearance decreased 89 basis points to 8.27%, while the forbearance share for portfolio loans and private-label securities decreased by 33 basis points to 10.06%.
The percentage of loans in forbearance for depository servicers decreased 50 basis points to 6.53%, and the percentage of loans in forbearance for independent mortgage bank servicers decreased 54 basis points to 6.65%.
The share of loans in forbearance declined across all loan types, says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. With the forbearance program for federally backed loans under the CARES Act reaching the six-month mark, many borrowers saw their forbearance plans expire because they did not contact their servicer.
Another reason for expirations was that borrower information needed to determine an appropriate loss mitigation option was not yet in place, Fratantoni says. Borrowers with federally backed mortgages need to contact their servicer to obtain another six months of reprieve if they are still impacted by the pandemic. As of now, some borrowers are exiting forbearance without making contact or without a plan in place. Servicers are making outreach efforts to attempt to work with these borrowers to determine the best options for them, including an extension, he said.
On a more positive note, nearly two-thirds of borrowers who exited forbearance remained current on their payments, repaid their forborne payments, or moved into a payment deferral plan, adds Fratantoni. All of these borrowers have been able to resume – or continue – their pre-pandemic monthly payments.