The forbearance output volume continues to increase

The share of US homeowners at some stage of forbearance continues to decline nationally, falling to 4.04% of all mortgages according to the latest Mortgage Bankers forbearance and call volume survey Association (MBA). That total is down from last week’s share, when abstentions accounted for 4.16% of all mortgage volume. The MBA estimates that around two million homeowners are currently on forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance fell nine basis points from 2.18% to 2.09%. Forborne Ginnie Mae loans fell 32 basis points from 5.54% to 5.22%, while the share of forbearance for portfolio loans and private label securities (PLS) increased by two basis points, from 8.31% to 8.33%. The percentage of loans in forbearance for managers of independent mortgage banks (IMBs) decreased by 13 basis points to 4.21%, and the percentage of loans in forbearance for depository agents decreased by 14 basis points to 4 , 19%.

“The share of loans withheld has now declined for 15 consecutive weeks, with a larger drop this week as many hit the 15-month mark,” said Mike Fratantoni, senior vice president and chief economist of the MBA. “Abstention outflows increased – as is usually the case at the start of a month – and reached the fastest pace since April. New forbearance requests, at four basis points, remained at an extremely low level. “

By stage, 10.6% of the total forbearance loans are at the initial stage of the forbearance plan, while 83.6% are in extension forbearance. The remaining 5.8% are income from abstention.

“We are seeing an increase in the share of forbearance exits, where borrowers do not have a loss mitigation plan in place,” Fratantoni said. “Homeowners who are nearing the end of their forbearance period should contact their service agent to discuss next steps in the process, as agents cannot extend the forbearance period without talking to the borrower. “

Among the cumulative abstentions for the period from June 1, 2020 to June 6, 2021:

  • 27.4% resulted in a loan deferral / partial claim.
  • 24.3% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 15.3% represented borrowers who had not made all of their monthly payments and walked out of forbearance without a loss mitigation plan still in place.
  • 13.9% resulted in reinstatements, in which overdue amounts are reimbursed when the abstention is terminated.
  • 10.1% 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.
  • The remaining 1.5% resulted in redemption plans, short sales, acts in lieu or other reasons.

In terms of call center volume, the number of calls increased from the previous week from 6.5% to 6.9%, with the average call time remaining unchanged at 7.8 minutes.

“The economy is recovering remarkably quickly and as the restrictions related to the pandemic continue to lift, economic growth will remain strong over the next few months,” said Sam Khater, chief economist at Freddie Mac, in a recent statement. .

And the job market continues to grow, with industries hit by the pandemic returning to the job market. The U.S. Department of Labor reported, for the week ending June 5, the advanced seasonally adjusted initial jobless claims figure was 376,000, down 9,000 from the previous week’s unrevised level of 385,000, marking the lowest level for initial requests since March 14. , 2020 when it was 256,000.

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