Latest Monthly Forbearance Exits Update From MBA

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Latest Monthly Forbearance Exits Update From MBA

Jun 27, 2023 | News | 0 comments

According to the most recent loan monitoring survey by the Mortgage Bankers Association, more than 96% of homeowners have successfully managed to keep up with their mortgage payments. The survey tracks the number of loans in forbearance each month.

As of May 31, the percentage of loans in forbearance has decreased by two basis points, going from 0.51% in April to 0.49% of the total volume of loans held by servicers. This indicates that approximately 245,000 homeowners in the United States are currently enrolled in forbearance plans, according to estimates by the MBA.

In May, the percentage of Ginnie Mae loans in forbearance dropped from 1.11% to 1.05%. Fannie Mae and Freddie Mac loans decreased from 0.24% to 0.23%. The percentage of portfolio loans and private-label mortgage-backed securities experienced a decline from 0.61% to 0.58%. Since March 2020, mortgage servicers have granted forbearance to nearly eight million borrowers, according to the MBA.

The rate of current, non-delinquent, and non-foreclosure serviced loans increased from 95.89% to 96.12% on a monthly basis. This is the highest level since the implementation of the CARES Act in March 2020. According to Marina Walsh, MBA’s vice president of industry analysis, the favorable job market and successful loss mitigation measures over the past three years have contributed to over 96% of homeowners staying current on their mortgages.

When examining loans in forbearance, the study found that 35% were in the initial plan stage, while 52.6% were in a forbearance extension. The remaining cases were re-entries with or without extensions.

In terms of forbearance exits, there was a one basis point increase to 0.11% compared to the cumulative servicing portfolio volume.

Out of the forbearance exits analyzed, approximately 29.6% were classified as loan deferrals or partial claims. About 18% of exits indicated borrowers who continued to make monthly payments during the forbearance period. A comparable fraction consisted of borrowers who failed to complete their monthly payments and departed without implementing a loss mitigation strategy. Roughly 16.1% resulted in loan modifications, while slightly over 10% resulted in reinstatements. Around 6.6% of exits were attributed to loans being paid off through home sales or refinancing.

By May 31, the states in the US with the highest proportion of current loans were Washington, Idaho, Colorado, California, and Oregon. Conversely, the states with the lowest proportion of current loans were Louisiana, Mississippi, West Virginia, New York, and Indiana.