Almost 4.3 million mortgages were in forbearance during May’s final week, representing 8.53% of outstanding home loans, the Mortgage Bankers Association said on Monday.
The numbers increased from 4.2 million mortgages in the prior week, which accounted for an 8.46% share, MBA said.
Private-label loans led the increase, rising to a 10% share from 9.67%, the report said. The forbearance share for mortgages backed by Fannie Mae and Freddie Mac rose to 6.4% from 6.39%, while the percentage for loans backed by the Federal Housing Administration and the Veterans Administration increased to 11.83% from 11.82%.
“While servicers reported only a 1-basis-point increase in the forbearance share for GSE and Ginnie Mae loans, the increase for private-label securities and portfolio loans rose to over 10 percent, which is higher than the rate on GSE loans,” said Mike Fratantoni, MBA’s chief economist.
While the forbearance share is still rising, requests for agreements to suspend payments are slowing as states allow businesses to reopen in the midst of the COVID-19 pandemic with new safety measures in place.
Forbearance requests as a percent of servicing portfolio volume dropped across all investor types for the eighth consecutive week, falling to 0.17% from 0.20%, the MBA report said.
“With the job market beginning to gradually improve, more homeowners are exiting forbearance, and we are seeing declines in forbearance volume among some servicers,” Fratantoni said.
Despite the drop in new forbearance requests, calls to mortgage servicing centers, measured as a percentage of portfolio volume, rose to 6.7% from 6.4%, Fratantoni said.
“The increase in weekly servicer call center volume was likely driven by end-of-month payment inquiries,” he said.
The average time it took to answer calls increased to 1.6 minutes from 1.3 minutes, the MBA report said. The average length of calls grew to 7.3 minutes from 6.7 minutes.
The abandonment rate, in which callers give up before speaking to a service-center worker, rose to 5.2% from 4%, the MBA report said.