The Day – Percentage of mortgage loans in deferral drops slightly to 4.16 percent

The latest Forbearance and Call Volume Survey by the Mortgage Bankers Association (MBA) found that the total number of loans now in forbearance rose 2 basis points from 4.18% of the servicer’s portfolio volume in the previous week to 4.16% as of May 30, 2021 has decreased. MBA estimates that 2.1 million homeowners are on forbearance plans.

The Fannie Mae and Freddie Mac loan share of the forbearance decreased 1 basis point to 2.18%. Ginnie Mae’s deferred loans decreased 1 basis point to 5.54%, while the deferral rate for portfolio loans and private label securities (PLS) decreased 6 basis points to 8.31%. The deferred mortgage servicer (IMB) percentage decreased 2 basis points to 4.34% and the deferred custodian percentage decreased 1 basis point to 4.33%.

“The percentage of deferred loans declined for the 14th straight week, with slight declines for most investor types and all servicer types,” said Mike Fratantoni, senior vice president and chief economist, MBA. “Forbearance exits fell to 6 basis points, the lowest weekly level since mid-February, but new forbearance inquiries were 4 basis points, the latest weekly low in early May.”

Fratantoni added: “Although employment growth in May was lower than many expected, other data shows a stronger labor market. This is good news for homeowners who have been in trouble and looking for work as more families can regain their income and start making their mortgage payments again.

Key Findings of Forbearance and Call Volume MBA Survey – May 24-30, 2021

  • Total deferred loans decreased by 2 basis points compared to the previous week: from 4.18% to 4.16%.
    • According to investor type, the proportion of Ginnie Mae loans in deferral decreased compared to the previous week: from 5.55% to 5.54%.
    • The proportion of Fannie Mae and Freddie Mac loans in the forbearance decreased compared to the previous week: from 2.19% to 2.18%.
    • The proportion of other loans (e.g. portfolio and PLS loans) in deferral fell compared to the previous week: from 8.37% to 8.31%.
  • By stage, 11.1% of total deferral loans are in the initial deferral plan phase, while 83.2% are in a deferral extension. The remaining 5.7% are forbearance re-entries.
  • The total weekly forbearance requests as a percentage of the servicing portfolio volume (#) decreased compared to the previous week: from 0.05% to 0.04%.
  • Of the cumulative forbearance exits for the period from June 1, 2020 to May 30, 2021:
    • 27.4% led to a loan deferral / partial claim.
    • 24.6% represented borrowers who continued their monthly payments during their deferral period.
    • 15.0% represented borrowers who did not make all of their monthly payments and ended the deferral without an existing loss mitigation plan.
    • 14.0% resulted in replenishments where overdue amounts are paid back upon expiry of the deferral.
    • 10.0% resulted in a loan change or a trial loan change.
    • 7.5% resulted in loans being paid off either by refinancing or by selling the home.
    • The remaining 1.5% resulted from repayment plans, short sales, replacement contracts or other reasons.
  • Weekly Servicer Call Center Volume:
    • As a percentage of the volume of the servicing portfolio (#), the calls remained the same compared to the previous week at 6.5%.
    • The average response speed decreased from 1.3 minutes to 1.2 minutes.
    • The dropout rate fell from 4.1% to 3.8%.
    • The average call duration increased from 7.7 minutes to 7.8 minutes.
  • Forbearance loans in relation to servicing portfolio volume (#) as of May 30, 2021:
    • Total: 4.16% (previous week: 4.18%)
    • IMBs: 4.34% (previous week: 4.36%)
    • Depots: 4.33% (previous week: 4.34%)

—Association of Mortgage Lenders

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