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WASHINGTON, D.C. (November 20, 2023) – The Mortgage Bankers Association’s (MBA) month-to-month Loan Monitoring Survey revealed that the whole variety of loans now in forbearance decreased by 2 foundation factors from 0.31% of servicers’ portfolio quantity within the prior month to 0.29% as of October 31, 2023. According to MBA’s estimate, 145,000 householders are in forbearance plans. Mortgage servicers have offered forbearance to roughly 8 million debtors since March 2020.
In October 2023, the share of Fannie Mae and Freddie Mac loans in forbearance remained flat at 0.18%. Ginnie Mae loans in forbearance decreased 5 foundation factors to 0.52%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 3 foundation factors to 0.32%.
“For the first time since MBA began tracking the reasons for forbearance in October 2022, temporary hardships such as job loss, death, and divorce represent a larger share of loans in forbearance by reason than a COVID-19 hardship,” stated Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “This upward trend will continue, as Fannie Mae and Freddie Mac sunset the use of COVID-19 as a reason for delinquency starting in November 2023,[1] and FHA’s COVID-19 forbearance period ends at the end of November 2023[2].”
Added Walsh, “Forbearance is still an option for many distressed homeowners, but in most cases, the requirements to obtain a forbearance will not be as streamlined as they were during the pandemic.”
Key Findings of MBA’s Loan Monitoring Survey – October 1 to October 31, 2023
- Total loans in forbearance decreased by 2 foundation factors in October 2023 relative to September 2023: from 0.31% to 0.29%.
- By investor kind, the share of Ginnie Mae loans in forbearance decreased relative to the prior month: from 0.57% to 0.52%.
- The share of Fannie Mae and Freddie Mac loans in forbearance remained the identical relative to the prior month at 0.18%.
- The share of different loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior month: from 0.35% to 0.32%.
- Loans in forbearance as a share of servicing portfolio quantity (#) as of October 31, 2023:
- Total: 0.29% (earlier month: 0.31%)
- Independent Mortgage Banks (IMBs): 0.36% (earlier month: 0.37%)
- Depositories: 0.23% (earlier month: 0.25%)
- By purpose, 45.4% of debtors are in forbearance for causes corresponding to a brief hardship attributable to job loss, demise, divorce, or incapacity; whereas 43.3% of debtors are in forbearance due to COVID-19. Another 11.3% are in forbearance due to a pure catastrophe.
- By stage, 45.1% of whole loans in forbearance are within the preliminary forbearance plan stage, whereas 47.0% are in a forbearance extension. The remaining 7.9% are forbearance re-entries, together with re-entries with extensions.
- Of the cumulative forbearance exits for the interval from July 1, 2020, by October 31, 2023, on the time of forbearance exit:
- 29.4% resulted in a mortgage deferral/partial declare.
- 17.7% represented debtors who continued to make their month-to-month funds throughout their forbearance interval.
- 18.3% represented debtors who didn’t make all of their month-to-month funds and exited forbearance and not using a loss mitigation plan in place but.
- 16.1% resulted in a mortgage modification or trial mortgage modification.
- 10.8% resulted in reinstatements, wherein past-due quantities are paid again when exiting forbearance.
- 6.5% resulted in loans paid off by both a refinance or by promoting the home.
- The remaining 1.2% resulted in compensation plans, quick gross sales, deed-in-lieus or different causes.
- Total loans serviced that had been present (not delinquent or in foreclosures) as a p.c of servicing portfolio quantity (#) decreased to 95.80% (on a non-seasonally adjusted foundation) in October 2023 from 95.83% in September 2023.
- The 5 states with the best share of loans that had been present as a p.c of servicing portfolio: Washington, Colorado, Idaho, Oregon, and California.
- The 5 states with the bottom share of loans that had been present as a p.c of servicing portfolio: Louisiana, Mississippi, Indiana, West Virginia, and New York.
- Total accomplished mortgage exercises from 2020 and onward (compensation plans, mortgage deferrals/partial claims, mortgage modifications) that had been present as a p.c of whole accomplished exercises elevated to 72.30% in October from 72.20% the earlier month.
The subsequent publication of the Monthly Loan Monitoring Survey (LMS) will probably be launched on Monday, December 18, 2023, at 4:00 p.m. ET.
