Mortgage Forbearance Volume Down to 2.96% Days Before September 30 Deadline
Welcome to Sagent’s weekly homeowner hardship briefing where we analyze the latest market data, including the Mortgage Bankers Association’s forbearance data, to offer key takeaways for servicers.
Here’s what’s new this week:
1. Mortgage Forbearance Volume Dips Below 3%
The latest MBA forbearance data shows — as I predicted last week — that the total number of mortgage loans in forbearance has decreased by 4 basis points from 3.00% last week to 2.96% as of September 19, 2021. This marks the first time that forbearance volume has fallen below 3.00% since the start of the pandemic.
While this is a positive milestone, particularly with the September 30th deadline just days away, there are still an estimated 1.5 million homeowners in forbearance.
2. Ginnie Mae and Private-Label Securities Numbers Climb
Despite the overall decrease in forbearance volume, which finally dropped below 3% for the first time since March 2020, this week saw an increase in both Ginnie Mae and PLS loans in forbearance
Per the MBA’s latest data, Ginnie Mae loans in forbearance increased 3 basis points from 3.39% to 3.42%, and the forbearance share for portfolio loans and PLS decreased 4 basis points from 6.95% to 6.91%.
As Mike Fratantoni, senior vice president and chief economist at the MBA, explained, “New forbearance requests and re-entries continue to run at a higher rate for Ginnie Mae loans as well as for portfolio and PLS loans, which include many delinquent FHA, VA, and USDA loans that have been bought out of Ginnie Mae pools.”
This trend definitely concerns me and suggests that, in spite of overall decreases in forbearance volume, we’re still not quite out of the woods yet.
3. Number of Borrowers Exiting Without Plan Drops
On a positive note, the total number of borrowers exiting forbearance without a loss mitigation plan in place has dropped below 10%.
Additionally, the MBA Call Volume Survey indicates that call volume has increased from 6.3% to 7.9%, average answer speed dipped from 1.8 minutes to 1.7, and call length went down from 8.3 minutes to 8.2 all in the last week.
These numbers signal that borrowers are engaging more directly with their servicers on post-accommodation options.
The Bottom Line
Servicers have been grinding for months, and we are days away from the September 30th deadline. While the decrease in total forbearance numbers is a positive trend, the pressure on servicers continues to mount. We’re glad to see the number of borrowers exiting without a loss mit plan has dropped, however, a significant number of borrowers still remain in forbearance and need help finding their way out.
Sagent’s loss mitigation and consumer platforms are here to help you augment your borrower outreach methods and keep you on the front lines of the fight for your customers. I’ll be on standby to answer your policy questions and talk about how to help you care for borrowers during the final week of this strenuous COVID recovery.