Another week, another drop in forbearance volume.
Approximately 1.74 million homeowners are in forbearance plans, the MBA reported.
The share of Fannie Mae and Freddie Mac loans in forbearance also decreased two basis points to 1.81%, and Ginnie Mae loans decreased one basis point to 4.35%. The share for portfolio loans and private-label securities (PLS) increased five basis points to 7.38%.
Fannie and Freddie loans in forbearance have now stayed below 2% for several consecutive weeks, noted Mike Fratantoni, MBA’s senior vice president and chief economist.
“As is typical for mid-month reporting, forbearance exits slowed, and there was a slight increase in new requests,” Fratantoni said. “The net result was a small drop in the share of loans in forbearance – the 21st consecutive week of declines.”
According to the White House, the pandemic-related foreclosure ban extended by the United States Department of Agriculture (USDA), the Department of Veterans Affairs (VA) and the Department of Housing and Urban Development (HUD) will lift on July 31. The Federal Housing Finance Agency, which oversees Fannie and Freddie, echoed that its ban will lift at the end of the month.
By stage, 9.8% of total loans in forbearance are in the initial plan stage, while 83.2% are in an extension. The remaining 7% are re-entries.
Of the cumulative exits for the period from June 1, 2020, through July 18, 2021, 28% resulted in loan deferrals or partial claims. Another 23.2% represented borrowers who continued to make their monthly payments during their forbearance period.
Nearly 16% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place. About 11% resulted in a loan modification or trial loan modification.