The rate dropped from 6.32% in the prior week, MBA said in a report on Monday.
The decline was largely led by portfolio loans and private-label securities as their share of mortgages in forbearance fell to 8.86% from 10.06% the week prior.
The forbearance rate for Fannie Mae and Freddie Mac loans declined twenty-six basis points to 3.77% — the 19th week in a row GSE loans in forbearance have fallen. The rate for Ginnie Mae loans that include loans backed by the Federal Housing Administration dropped thirteen basis points to 8.14%.
“The steady improvement for Fannie Mae and Freddie Mac loans highlights the improvement in some segments of the job market and broader economy. The slower decline for Ginnie Mae loans continues to show that this improvement has not been uniform, and that many are still struggling to regain their footing,” said Mike Fratantoni, MBA’s senior vice president and chief economist.
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“Federally backed loans under the CARES Act are eligible to be extended for up to 12 months, but borrowers must contact their servicer for an extension,” Fratantoni said. “Without that contact, borrowers exit forbearance, whether they are delinquent or current on their loan.”
About 26.32% of total loans in forbearance are in the initial plan stage, while 72.08% are in a forbearance extension, MBA said. The remaining 1.6% are forbearance re-entries, the report said.
The volume of calls from mortgage borrowers to the servicers handling their home loans fell to 8.2%, measured as a share of overall servicing portfolio, from 8.8% in the prior week, the MBA report said.