How the end of mortgage forbearance impacts the market
Today’s HousingWire Daily features an interview with Constant AI President and COO Carissa Robb. In this episode, Robb discusses mortgage forbearance and how the U.S. housing market will be impacted once moratoriums come to an end.
For some background on the interview, here’s a brief summary of HousingWire’s latest coverage of mortgage forbearance:
The total number of servicers’ loans in forbearance fell for the ninth straight week this week. However, due to a slowdown in exits, mortgage forbearance portfolio volume dipped just two basis points last week to an average of 4.47%, according to the Mortgage Bankers Association.
Several investor types were down by just a single digit basis points, with Fannie Mae and Freddie Mac loans falling two points to 2.42%, while Ginnie Mae loans slid seven basis points to 6.02%.
On the other hand, the forbearance share for portfolio loans and private-label securities (PLS) increased by 13 basis points to 8.55%.
“The increase in the forbearance share for portfolio and PLS loans highlights both the ongoing buyouts of delinquent loans from Ginnie Mae pools as well as an increased share for other loans that are not federally backed,” said Mike Fratantoni, MBA’s senior vice president and chief economist.
Overall, the uneven scale of entries and expirations pushed the mortgage forbearance rate of exits to the lowest level since February, the MBA said. By stage, 12.8% of total loans in forbearance are in the initial forbearance plan stage, while 82.3% are in a forbearance extension. The remaining 4.9% are forbearance re-entries.
Of the cumulative mortgage forbearance exits for the period from June 1, 2020, through April 25, 2021, 25.3% represented borrowers who continued to make their monthly payments during their forbearance period. For months now this number has been inversely dropping against a rising percentage of borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet — which is back up to 14.6% as of last week.
HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Victoria Jones.
HousingWire articles covered in this episode:
- Forbearance slides to 4.47% after a lackluster week of exits
- Mortgage complaints hit three-year-high, CFPB says
- CFPB doubles down on mortgage servicing enforcement – HousingWire
- What is mortgage forbearance? A comprehensive FAQ