The total number of loans in forbearance decreased from 5.54% to 5.48% as of Dec. 6, according to the Mortgage Bankers Association.
Fannie Mae and Freddie Mac loans in forbearance decreased to 3.26% – an 8-point improvement. Ginnie Mae loans in forbearance decreased 21 points to 7.68%
Despite a dramatic point improvement, borrowers are still seeking relief, according to Mike Fratantoni, MBA’s senior vice president and chief economist.
“New forbearance requests reached their highest level since the week ending August 2, and servicer call volume hit its highest level since the week ending April 19,” Fratantoni said. “Compared to the last two months, more homeowners exiting forbearance are using a modification – a sign that they have not been able to fully get back on their feet, even if they are working again.”
Fratantoni added that this shows an economic slowdown, with an increase in layoffs and long-term unemployment. The country’s unemployment rate did drop to 6.7% in November, however, from 6.9% in October.
“Coupled with the latest surge in COVID-19 cases, it is not surprising to see more homeowners seeking relief,” he said.
The forbearance share for portfolio loans and private-label securities (PLS) increased by 19 points to 8.89%, while the percentage of loans in forbearance for independent mortgage bank servicers decreased four points to 5.98%
Total weekly forbearance requests as a percent of servicing portfolio volume increased from 0.08% to 0.12%.
Measured as a percent of servicing portfolio, call center calls rose to 9.4% from 5.3% the prior week, the MBA report said.