The share of mortgage loans in forbearance fell for the fourth week in a row to 8.18% according to the Mortgage Bankers Association’s Forbearance and Call Volume survey. The MBA approximates 4.2 million homeowners are now in forbearance.
Broken down by investor type, Fannie Mae and Freddie Mac loans fell for the fifth week in a row to 6.07%, according to the report.
Ginnie Mae mortgages – primarily backed by the Federal Housing Administration and the Veterans Administration – fell to 10.56%. As loans were brought out of Ginnie Mae pools and into bank portfolios, the share of portfolio loans and private-label securities in forbearance increased to 10.93%.
“These buyouts enable servicers to stop advancing principal and interest payments, and to work with borrowers in the hope that they can begin paying again before they are re-securitized into Ginnie Mae pools,” said Mike Fratantoni, MBA’s senior vice president and chief economist.
The percentage of loans in forbearance for depository servicers and for independent mortgage bank servicers also both fell to 8.80% and 8.10%, respectively.
Although more than 10% of borrowers entered into a deferral plan to exit forbearance, that was down from 16% the week prior, according to the report.
“Forty-three percent of loans in forbearance are now in an extension following their initial forbearance term,” said Fratantoni. “For those exiting forbearance over the next several months, we expect to see many of the borrowers with GSE loans to utilize the deferral option.”
Prior to COVID-19 shutting down the U.S. economy, the MBA reported the overall forbearance rate was 0.25%.
To learn more about the CARES Act, and stay up to date on all the latest news and information on forbearance, check out HousingWire’s newest forbearance resource here.