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About 7M refi candidates missed the “forever rate” boat

Rates jumped to 3.17% last week and Black Knight reported that there are now just 11.1 million “high quality” refi candidates. The smallest number of potential refi candidates in a year.


Mortgage forbearance rate falls 20 basis points to 5.47%

Share of loans in forbearance fall in every category, though 2.7 million Americans are still in a plan

The U.S. forbearance rate measuring the share of mortgages with suspended payments experienced a 20 basis points improvement last week after it fell to 5.47% from 5.67% the week prior, according to the Mortgage Bankers Association. The U.S forbearance rate has now fallen for 11 consecutive weeks with an estimated 2.7 million homeowners still in mortgage forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance fell 13 basis points to 3.36% – marking the 23rd week in a row the GSEs’ forbearance rate has dropped.

The rate for Ginnie Mae loans, which include loans backed by the Federal Housing Administration, also continued their decline last week after falling 25 basis points to 7.7%.

However, the mortgage forbearance share for portfolio loans and private-label securities (PLS) experienced the greatest decline – down 32 basis points to 8.38%.

The forbearance share for independent mortgage bank servicers also fell 25 basis points to 5.94%, while the percentage of loans in forbearance for depository servicers decreased 17 basis points to 5.43%.

“While the rate of new forbearance requests has declined and exits are increasing, homeowners who continue to be impacted by hardships related to the pandemic should contact their servicer for relief,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “More than 76% of borrowers in forbearance are now in an extension, as we are well past the six-month point for most borrowers’ forbearance plans.”

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Presented by: TMS

In fact, an estimated 76.4% of total loans in forbearance were in some sort of extension, while approximately 21.68% are in the initial stage. The remaining 1.86% are forbearance re-entries.

But some borrowers may not be contacting their servicers like Fratantoni suggested. For the second week in a row, the number of borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place rose to 12.8% from 12% the week prior. That number encompasses those who have exited forbearance from the period of June 1 through Nov. 1.

Of the cumulative forbearance exits for the period from June 1 through Nov. 8, 30.6% were borrowers who continued to make their monthly payments during their forbearance period. That number is down from 31.6% reported in the week prior.

Last week, Fratantoni said the data continued to show that servicers are still having difficulties reaching borrowers who have met the six-month point of their forbearance period. However, this past week, as a percent of servicing portfolio volume, calls increased from 8.1% to 8.3% in servicers call centers.

After the release of its Mutual Mortgage Insurance Fund annual report, FHA commissioner and assistant secretary for the Department of Housing and Urban Development Dana Wade said the FHA will shift its focus in 2021 to helping borrowers exit forbearance and receive assistance to sustain mortgage payments.

The housing industry is about a month and a half away now from its deadline for single-family homeowners to request forbearance through Dec. 31, 2020 for both loans backed by the FHA and the Federal Housing Finance Agency – the same day their foreclosure moratoria are also set to expire.

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