Forbearances fall for third week in a row, to 5.22%

The total number of mortgages in forbearance declined seven basis points to 5.22% in the week ending Feb. 14, according to the latest estimate from the Mortgage Bankers Association.

The trade group said 2.6 million homeowners are currently in forbearance plans.

“The share of loans in forbearance has declined for three weeks in a row, with portfolio and PLS loans decreasing the most this week. This decline was due to a sharp increase in borrower exits, particularly for IMB servicers,” said Mike Fratantoni, MBA’s senior vice president and chief economist.

Fannie Mae and Freddie Mac‘s forbearance portfolio continued to express the lowest share of loans, decreasing four basis points to 2.97%. Ginnie Mae‘s share, which include loans backed by the Federal Housing Administration, fell 2 basis points to 7.32%, while the share for portfolio loans and private-label securities (PLS) dropped a full 20 basis points from the prior week, at 8.94%.

The percentage of loans in forbearance for nonbank servicers also dropped 15 basis points to 5.54%, while the percentage of loans for depository servicers decreased 2 basis points to 5.28%.


From forbearance to post-forbearance: How to make the process effective

To accommodate the large volume of loans still in forbearance, mortgage servicers must have functional, flexible and effective processes in place. Here are some actionable steps to create that process.

Presented by: FICS

The MBA’s survey found that of the cumulative exits between June 1, 2020, and Feb. 14, 27.9% of borrowers continued to make their monthly payments during the forbearance period while over 15% of exits represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place.

Overall, the MBA noted that new forbearance requests are also falling – down six basis points to match a survey low.

“The housing market is quite strong, with home sales, home construction, and home price data all testifying to this strength,” Fratantoni said. “Policymakers and the mortgage industry have helped enable this during the pandemic by providing millions of homeowners support in the form of forbearance.”

In the week prior, forbearance was once again extended by the Biden administration, pushing out forbearance and eviction moratoriums an additional three months, through June 30, 2021. This measure only applies to those with a loan backed by the FHA, though Fannie and Freddie recently extended forbearance requests up to 15 months.

Now, data is showing the affects of long-standing moratoriums. Black Knight’s December mortgage monitor report revealed foreclosure starts hit a record low in 2020, falling by 67% from the year prior as moratoriums and forbearance plans protected homeowners.

Based on the rate of improvement to date, Black Knight estimates there could be more than 2.5 million active forbearance plans remaining at the end of March 2021 when the first wave of plans reaches their 12-month expirations.

For four months now, the forbearance portfolio volume has hovered between 5% and 6% — the longest a percentage range has held since the survey’s origins in May.

Source: housingwire.com

Forbearance rate drops again, to 5.29%

The total number of mortgages in forbearance declined six basis points to 5.29% in the week ending Feb. 7, according to the latest estimate from the Mortgage Bankers Association.

The trade group said 2.6 million homeowners are currently in forbearance plans.

“The share of loans in forbearance declined to the lowest level since April 5th of last year, due to decreases in both the GSE and Ginnie Mae portfolios,” said MBA Vice President and Chief Economist Mike Fratantoni.

According to the MBA, Fannie Mae and Freddie Mac loans in forbearance decreased six basis points to 3.01%. Ginnie Mae loans decreased 12 basis points to 7.34%, while the share for portfolio loans and private-label securities (PLS) remained unchanged relative from the prior week, at 9.14%.

The percentage of loans in forbearance for nonbank servicers decreased 4 basis points to 5.69%, while the percentage of loans in forbearance for depository servicers decreased 10 basis points to 5.26%.


From forbearance to post-forbearance: How to make the process effective

To accommodate the large volume of loans still in forbearance, mortgage servicers must have functional, flexible and effective forbearance processes in place. Here are some actionable steps to create that process.

Presented by: FICS

“Similar to the trend in recent months, the first week of February
showed a faster pace of exits from forbearance compared to recent weeks, while new forbearance requests were unchanged,” Fratantoni said.

“MBA expects the rollout of the vaccines to boost economic growth through the course of the year, leading to a stronger job market and a greater ability for more struggling homeowners to get back on their feet. We do believe that additional support is needed until they have regained their jobs and incomes.”

According to the MBA, 16.07% of total loans in forbearance are in the initial stage while 81.42% are in a forbearance extension. Just over 2.5% are forbearance re-entries.

The MBA’s survey found that of the cumulative exits between June 1, 2020, and Feb. 7, 28.2% of borrowers continued to make their monthly payments during the forbearance period. Of those exiting forbearance, 25.5% resulted in a loan deferral/partial claim, and 15.4% resulted in reinstatements, in which past-due amounts are paid back upon exit.

About 14% of exits represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place. The survey found that 7.7% of exits resulted in loan modifications, and 7.5% of exits resulted in loans paid off through either a refinance or by selling the home.

On the day that the MBA released its latest survey, the Biden administration extended forbearance and eviction moratoriums an additional three months, through June 30, 2021. Homeowners with FHA loans will now be able to receive up to six months of additional mortgage payment deferrals if they entered before June 30, 2020. The Biden administration’s FHA also gave homeowners more time to request a pause or reduction in mortgage payments through the CARES Act.

However, the measures made Tuesday don’t apply to borrowers with loans backed by Fannie Mae and Freddie Mac. Those borrowers can request forbearance for up to 15 months if they apply by the end of February.

Source: housingwire.com

Forbearance rate slowly descends to 5.35%

The U.S forbearance rate is falling, though not as quickly as it once was.

Data released on Monday by the Mortgage Bankers Association showed that the share of servicers’ portfolio volume in forbearance fell 3 basis points to 5.35% last week.

For the third month in a row, the MBA estimated 2.7 million homeowners are in some form of forbearance, and for almost four months now, forbearance portfolio volume has hovered between 5% and 6% — the longest a percentage range has held since the survey’s origins in May.

However, in the current environment, any sign of forbearance waning is a welcome one. Last week every investor class managed to see declines, with Fannie Mae and Freddie Mac once again claiming the lowest forbearance rate at 3.07%.

Ginnie Mae loans in forbearance, which include loans backed by the Federal Housing Administration, also fell 5 basis points to 7.46%. And even though servicers continued to buy out delinquent loans from the Ginnie Mae pool (subsequently reclassifying them as portfolio loans) the forbearance share for portfolio and private-label securities also managed to fall to 9.14%.


Here’s how to find property owners ready to sell

In today’s low-inventory environment, complicated by external factors such as forbearance and foreclosure moratoriums, it’s crucial for real estate agents and brokers to be proactive in order to grow their business.

Presented by: PropStream

The MBA data shows that homeowners who remain in forbearance are more likely to be in distress, with fewer continuing to make any payments. According to Mike Fratantoni, the MBA’s chief economist, almost 14%of homeowners in forbearance were reported as current on their payments at the end of last month, but that share has declined nearly every month from 28% in May.

“While new forbearance requests increased slightly at the end of January, the rate of exits picked up somewhat, but remained much lower than in recent months. We are anticipating a sharp increase in exits in March and April as borrowers hit the 12-month expiration of their forbearance plans,” Fratantoni said.

Starting Nov. 2, the MBA began reporting the number of borrowers who continued to make their monthly payments during their forbearance period and have since exited. Since that date, the MBA has revealed that the number of up-to-date borrowers has consistently dropped.

To Fratantoni, servicers and policy makers need to be looking at the long-term unemployed, especially those who have been actively looking for work for 27 weeks or more as reported in January’s job data.

“These are the homeowners who are likely to still be in forbearance and
need additional support until the job market recovers to a greater extent,” Fratantoni said.

But economists are still showing signs of confidence in the market. HousingWire’s lead analyst, Logan Mohtashami, noted with an improving employment situation comes an economic improvement well past forbearance’s peak. Couple that with strong credit profiles from homeowners and nested equity and Mohtashami can outperform on rising home prices.

“This isn’t 2008 all over again. That recovery was slow, but today our demographics are better, and our household balance sheets are healthier. The fiscal and monetary assistance now is hugely improved from what we saw after 2008. We have everything we need to get America back to February 2020 jobs levels; we just need time,” Mohtashami said.

Source: housingwire.com

Forbearance rate left unchanged as exits slow

The U.S. forbearance rate was flat again last week at 5.38%, as a rise in portfolio loan and private label security forbearances offset declines for government-backed and government-insured loans, according to a survey from the Mortgage Bankers Association on Monday.

Fannie Mae and Freddie Mac once again claimed the smallest forbearance rate at 3.1% – a 1-basis-point improvement, and the lowest share the MBA has recorded for the government-sponsored enterprises since the survey began.

Ginnie Mae loans in forbearance, which include loans backed by the Federal Housing Administration, also managed to decline by 10 basis points last week to 7.51%

However, a 22-basis-point jump in the forbearance rate of portfolio loans and private-label securities offset the declines of almost every other investor class. Overall, the share of portfolio and PLS loans in forbearance rose to 9.16% after a 26-basis-point gain the week prior.

As servicers continued to buy out delinquent loans from the Ginnie Mae pools those loans became reclassified as portfolio loans, which is beneficial in lowering Ginnie Mae’s forbearance share but inversely pushes the portfolio/PLS share upwards.


Mortgage servicers take steps to support borrowers amid COVID-19

As call volumes have spiked to a level not seen since last April, lenders and servicers need to prepare for a significant increase in their workload as they help borrowers through difficult times.

Presented by: Computershare Loan Services

Though the forbearance rate overall remained unaltered, Mike
Fratantoni, MBA’s senior vice president and chief economist, reported the rate of exits from forbearance was at the slowest pace since the MBA began tracking exit data last summer.

As of last week, the MBA reported there are still 2.7 million borrowers in some form of forbearance, with that number remaining unchanged for nearly three months.

“Overall, the forbearance numbers have been little changed over the past few months. Homeowners still in forbearance are likely facing ongoing challenges with lost jobs, lost income, and other impacts from the pandemic,” Fratantoni said.

With improvement rates and exits slowing, data analytics company Black Knight estimates there are only 860,000 forbearance plan expirations scheduled for January and February. That’s less than the industry saw in December alone, which Black Knight said could limit potential removal activity over the next 60 days.

Starting Nov. 2, the MBA began reporting the number of borrowers who continued to make their monthly payments during their forbearance period and have since exited. Since that date, the MBA has revealed that the number of up-to-date borrowers has consistently dropped.

“With weekly start volumes still hovering around 50K, the new Biden administration proposal to extend the application deadline for entering forbearance plans could benefit a significant number of homeowners,” Black Knight said in it’s monthly Mortgage Monitor report.

Based on December’s numbers, Black Knight reported there could be more than 2.5 million active forbearance plans remaining at the end of March 2021.

Source: housingwire.com

Forbearances hold steady as exits slow

The U.S. forbearance rate held relatively steady last week, rising one basis point to 5.38% of servicers’ portfolio volume, according to a survey from the Mortgage Bankers Association released on Monday.

The virtually unchanged rate of forbearance volume can be attributed to a stalemate between steady declines in almost every investor class and a whopping 26 basis point jump in portfolio loans and private-label securities, bringing their forbearance share to 8.94%.

Fannie Mae and Freddie Mac, on the other hand, once again claimed the smallest forbearance rate at 3.11% while Ginnie Mae loans in forbearance, which include loans backed by the Federal Housing Administration, fell 6 basis points to 7.61%.

“The good news is that the forbearance numbers for GSE loans continues to decline more consistently, as these borrowers typically have stronger credit and more stable employment,” said Mike Fratantoni, MBA’s senior vice president and chief economist.

Starting Nov. 2, the MBA began reporting the number of borrowers who continued to make their monthly payments during their forbearance period and have since exited. Since that date, the MBA has revealed that the number of up-to-date borrowers has consistently dropped, and Fratantoni noted the rate of exits from forbearance also slowed in the week prior.


Here’s how to find property owners ready to sell

In today’s low-inventory environment, complicated by external factors such as forbearance and foreclosure moratoriums, it’s crucial for real estate agents and brokers to be proactive in order to grow their business.

Presented by: PopStream

 

Data analytics company Black Knight noted that last week’s sluggish forbearance removals were the second lowest weekly removal volume observed to date since the company began monitoring the situation in April. 

“Removal rates have also slowed noticeably following the six-month point of forbearance plans,” said Andy Walden, director of market research for Black Knight. “This suggests that those borrowers who remain in forbearance were likely more heavily impacted by the economic downturn and thus are less likely to leave such plans before the full allowable 12-month period runs down.”  

Of the cumulative forbearance exits for the period from June 1, 2020 through Jan. 17, 2021, 28.7% represented borrowers who continued to make their monthly payments during their forbearance period – a one basis point drop, according to the MBA.

During that same time period, those who exited without a loss mitigation plan in place also fell slightly to 13.4% from 13.5% the week prior.

The MBA once again estimates there are now 2.7 million Americans in some form of forbearance, and that number has remained unchanged for nearly two months.

According to a recent paper from researchers at the business schools of Columbia University, Northwestern University, Stanford University, and the University of Southern California, by October 2020, debt forbearance allowed U.S. consumers to miss about $43 billion of debt payments. If trends continue, more than 60 million consumers would miss about $70 billion of their debt payments by the end of the first quarter of 2021.

Source: housingwire.com