The forbearance share of mortgages backed by Fannie Mae and Freddie Mac dropped for the third straight week, while Ginnie Mae loans were unchanged, the Mortgage Bankers Association said in a report on Monday.
The forbearance share for mortgages backed by government-sponsored enterprises, or GSEs, fell five basis points to 6.26% during the week ended June 21, according to the MBA report. The forbearance share for loans in Ginnie Mae securities – meaning, mortgages backed by the Federal Housing Administration, the Veterans Administration, and the U.S. Department of Agriculture – was unchanged at 11.83%. The forbearance share for private-label mortgages that aren’t backed by the government increased 8 basis points to 10.07%.
Overall, the forbearance rate fell one basis point to 8.48%, representing 4.2 million mortgages, MBA said.
“The overall share of loans in forbearance declined for the second week in a row, led by the third straight drop in GSE loans,” said Mike Fratantoni, MBA’s chief economist. “Many borrowers initially received a three-month forbearance term, and as of June 21, 17% of loans in forbearance have now been extended, with the largest share of those being Ginnie Mae loans.”
Servicer call centers were busier, compared to the prior week, the report said. Calls from customers seeking forbearance rose to 7.8% from 7.7%, though the average call length decreased to 7 minutes from 7.1 minutes.
The average amount of time to answer the calls rose to 1.8 minutes from 1.5 minutes, and the abandonment rate measuring customers who hung up before speaking to a representative rose to 5.5% from 4.6%, the MBA report said.
Low mortgage rates have buoyed the housing market, pushing pending home sales up in May by 44%, the biggest monthly gain ever recorded, the National Association of Realtors said in a Monday report.
“The level of forbearance requests remains quite low as of mid-June,” Fratantoni said. “The rebound in the housing market is likely one of the factors that is providing confidence to both potential homebuyers and existing homeowners during these troubled times.”