The number of loans in forbearance is approaching the 1% mark

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Nationally, the number of forborne loans decreased by 13 basis points, from 1.18% of managers’ portfolio volume the previous month to just 1.05% as of March 31 2022. According to the Mortgage Bankers Association (MBA) Monthly Loan Monitoring Survey, an estimated 525,000 US homeowners are currently in forbearance plans.

“March was another month of lower forbearance rates and a higher share of forbearance-related global loans and restructuring loans that are ongoing,” said Marina Walsh, CMB, vice president of the MBA industry analysis. “The share of forbearing loans continues to decline and is only five basis points away from reaching 1% – or 500,000 homeowners – after peaking at 4.3 million borrowers in June 2020. acts a remarkable recovery for many owners in less than two years.”

By loan type, the share of loans from Fannie Mae and Freddie Mac (GSE) in forbearance fell seven basis points from 0.56% to 0.49%, while loans from Ginnie Mae during the abstention period fell by 12 basis points, from 1.50% to 1.38%. The forbearance share for portfolio loans and private label securities (PLS) decreased by 28 basis points, from 2.72% to 2.44%.

By stage, 29.7% of total loans in forbearance are in the initial stage of the forbearance plan, while 57.2% are in an extension of forbearance. The remaining 13.1% are admissions with abstention, including admissions with extensions.

Despite inflation concerns and rising rates, modest improvements in the jobs sector are supporting the rise in forbearance outflows, with the US Department of Labor reporting the seasonally adjusted insured unemployment rate at 1 .1% for the week ending April 2, unchanged from the previous week’s rate. The seasonally adjusted advanced insured unemployment number in the week ending April 2 fell to 1,475,000, down 48,000 from the previous week’s unrevised level of 1,523,000. The four-week average was 1,511,500, a decrease of 29,750 from the previous week’s unrevised average of 1,541,250.

Among the cumulative abstention exits for the period from June 1, 2020 to March 31, 2022, at the time of the abstention exit:

  • 29.2% resulted in a loan deferral/partial claim.
  • 18.9% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 17.1% represented borrowers who had not made all of their monthly payments and left forbearance without a loss mitigation plan in place yet.
  • 15.4% resulted in a loan modification or trial loan modification.
  • 11.4% resulted in reinstatements, in which overdue amounts are refunded upon exit from forbearance.
  • 6.7% resulted in loans being repaid either by refinancing or by selling the home.
  • The remaining 1.3% resulted from repayment plans, short selling, replacement acts or other reasons.

By region, the five states with the highest share of outstanding loans as a percentage of portfolio under management included: Idaho, Washington, Colorado, Utah and Oregon. Conversely, the five states with the lowest share of outstanding loans as a percentage of the portfolio under management were Louisiana, Mississippi, New York, West Virginia and Oklahoma.

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