950k+ Homeowners Have Been Extending Forbearances For At Least 1 Year

Welcome to Sagent’s weekly homeowner hardship briefing where we analyze the latest MBA data to offer key takeaways for servicers.

Here’s what you need to know this week about the most recent MBA forbearance data (through May 30):

1. Total Forbearance Volume Falls by Two Basis Points

According to the MBA, overall forbearance volume has fallen two basis points since last week to 4.16% of all mortgages, which equates to approximately 2.1 million borrowers still in forbearance (see Figure 1).

This is the 14th straight week of reduction in overall volume, and new requests for forbearance remain low.

2. Extensions, Re-entries Continue Slow Climb Upward

The latest data from the MBA shows another continuing trend as both forbearance extensions and re-entries continue to climb week-over-week (see Figure 2).

Of the 2.1M borrowers still in forbearance, 83.21% are in forbearance extensions and 5.68% have re-entered forbearance after previously exiting. With some quick math, that works out to approximately 1,747,410 borrowers in forbearance extensions and 119, 280 borrowers re-entering forbearance as of May 31.

3. 954k Homeowners Have Been Extending Forbearances for at Least 1 Year

One final  data point worth noting is that there are approximately 953,736 homeowners who have been extending forbearances for at least one year. This number is a rough approximation based on the MBA’s forbearance data through May 30.

The Bottom Line

Forbearances are still declining, but at a slow pace. Forbearance exits are steady, but so are re-entries. Most worrisome is the 950k+ borrowers who have been extending forbearances for at least one year.

We all know that the longer a borrower is in forbearance, the harder it is for the borrower to get out of forbearance, and this growing group of borrowers with mature forbearances in extension will not all be able to exit before policy relief expires.