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U.S. Mortgages in Forbearance Increase to 7.9 Percent in Early May

U.S. Mortgages in Forbearance Increase to 7.9 Percent in Early May


According to the Mortgage Bankers Association's latest Forbearance and Call Volume Survey, the total number of U.S. loans now in forbearance increased from 7.54% of servicers' portfolio volume in the prior week to 7.91% as of May 3, 2020. According to MBA's estimate, almost 4 million homeowners are now in forbearance plans.

Mortgages backed by Ginnie Mae again had the largest overall share of loans in forbearance by investor type (10.96%). The number of loans in forbearance for depository servicers rose to 8.75%, while the number of loans in forbearance for independent mortgage bank (IMB) servicers increased to 7.54%.

"With the calendar turning to May, the share of loans in forbearance increased, but the pace of the increase and incoming forbearance requests continued to slow," said Mike Fratantoni, MBA's Senior Vice President and Chief Economist. "The dreadful April jobs report showed a decline of more than 20 million jobs, and a spike in the unemployment rate to the highest level since the Great Depression. It will not be surprising if the forbearance numbers continue to rise. As we anticipated, FHA and VA borrowers have been most impacted by the job losses thus far, with the share of Ginnie Mae loans in forbearance at almost 11 percent."

Added Fratantoni, "Although the pace of forbearance requests slowed this week, call volume picked up - which could be a sign that more borrowers are calling in to check their options now that May due dates have arrived."

Key findings of MBA's Forbearance from April 27 to May 3, 2020

  • Total loans in forbearance grew relative to the prior week from 7.54% to 7.91%. In comparison, only 0.25% of all loans were in forbearance for the week of March 2.
  • By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 10.45% to 10.96%.
  • The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 5.85% to 6.08%.
  • The share of other loans (e.g. private label securities and portfolio loans) in forbearance increased relative to the prior week: from 8.30% to 8.88%.
  • Forbearance requests as a percent of servicing portfolio volume (#) dropped across all investor types for the fourth consecutive week relative to the prior week: from 0.63% to 0.51%.· However, weekly servicer call center volume was up:
  • As a percent of servicing portfolio volume (#), calls increased from 7.2% to 8.6%.
  • Average speed to answer increased relative to the prior week from 2.4 minutes to 2.6 minutes.
  • Abandonment rates increased from 5.8% to 6.6%.
  • Average call length increased from 6.9 minutes to 7.4 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of May 3, 2020:
  • Total: 7.91% (previous week: 7.54%)
  • IMBs: 7.54% (previous week: 7.13%)
  • Depositories: 8.75% (previous week: 8.41%)
MBA's latest Forbearance and Call Volume Survey covers the period from April 27 through May 3, 2020, and represents almost 77% of the first-mortgage servicing market (38.3 million loans).

 
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