The latest Mortgage Bankers Association (MBA) forbearance and call volume survey as of July 4, 2021 found that the total number of loans currently in forbearance fell 11 basis points from 3.87% the volume of the agent portfolio the previous week to 3.76%. . The MBA estimates that approximately 1.9 million US homeowners are currently at some stage of the forbearance plan.
“Abstention outflows increased during the July 4th holiday week at the fastest pace since early April,” said Mike Fratantoni, senior vice president and chief economist of MBA. “New claims have remained very low, resulting in a sharp decline in the share of forbeared loans, especially for Ginnie Mae loans, which also continue to be impacted by overdue loan buybacks. These loans are tracked as debts. portfolio loans after a buyout. “
The share of loans to government-sponsored businesses (GSEs) —Fannie Mae and Freddie Mac — in forbearance fell eight basis points, from 1.99% to 1.91%.
As noted by Fratantoni, Ginnie Mae’s forbeard loans fell 32 basis points from 5.10% to 4.78%, while the forbearance share for portfolio loans and securities from private label (PLS) rose two basis points to 7.94%. The percentage of forbeared loans for independent mortgage bank (IMB) services decreased 13 basis points from 4.0% to 3.87%, and the percentage of forbeared loans for depository services also decreased. decreased by 13 basis points, from 4.11% to 3.98%.
One positive trend that could accelerate abstention exits is the latest Bureau of Labor Statistics (BLS) employment report which reported that the US economy created 850,000 jobs in June. However, jobless claims last week saw a slight increase as for the week ending July 3 the figure put forward for seasonally adjusted initial jobless claims was 373,000, an increase of 2,000 from the level revised from the previous week.
By stage, 10.8% of the total forbearance loans were at the initial stage of the forbearance plan, while 82.7% were in an extension of forbearance, and the remaining 6.5% were in inflow of forbearance .
Among the cumulative abstentions for the period from June 1, 2020 to July 4, 2021:
- 27.8% resulted in a loan deferral / partial claim.
- 23.5% represented borrowers who continued to make their monthly payments during their forbearance period.
- 15.5% represented borrowers who had not made all of their monthly payments and walked out of forbearance without a loss mitigation plan still in place.
- 13.5% resulted in reinstatements, in which overdue amounts are reimbursed when the abstention is terminated.
- 10.7% resulted in a loan modification or a trial loan modification.
- 7.5% resulted in loans being repaid either by refinancing or by selling the house.
- 1.5% resulted in redemption plans, short sales, acts in lieu or other reasons.
“The mortgage default rate across the entire service portfolio decreased in June compared to May,” added Fratantoni. “However, the default rate rose slightly for homeowners who completed a workout. Borrowers who are now coming out of forbearance have likely been relieved for over a year, with nearly 60% of borrowers in. Forearm extension for more than 12 months These borrowers may have more difficulty getting back to regular payments.
In terms of provider call center volume, calls increased from the previous week, from 5.9% to 7.3%, with the average response speed falling from 1.0 minute to 1.5 minute and the average call duration increased slightly from 7.8 minutes to 8.0 minutes. .