by Calculated Risk on 10/12/2020 04:15:00 PM

Note: This is as of October 4th.

From the MBA: Share of Mortgage Loans in Forbearance Declines to 6.32%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 49 basis points from 6.81% of servicers’ portfolio volume in the prior week to 6.32% as of October 4, 2020. According to MBA’s estimate, 3.2 million homeowners are in forbearance plans.
...
“The share of loans in forbearance declined across all loan types. With the forbearance program for federally backed loans under the CARES Act reaching the six-month mark, many borrowers saw their forbearance plans expire because they did not contact their servicer. Another reason for expirations was that borrower information needed to determine an appropriate loss mitigation option was not yet in place,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Borrowers with federally backed mortgages need to contact their servicer to obtain another six months of reprieve if they are still impacted by the pandemic. As of now, some borrowers are exiting forbearance without making contact or without a plan in place. Servicers are making outreach efforts to attempt to work with these borrowers to determine the best options for them, including an extension.”

Added Fratantoni, “On a more positive note, nearly two-thirds of borrowers who exited forbearance remained current on their payments, repaid their forborne payments, or moved into a payment deferral plan. All of these borrowers have been able to resume – or continue – their pre-pandemic monthly payments.”
...
By stage, 25.50% of total loans in forbearance are in the initial forbearance plan stage, while 72.97% are in a forbearance extension. The remaining 1.53% are forbearance re-entries.
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April, and has been trending down for the last few months.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.08% to 0.11%."

There hasn't been a pickup in forbearance activity related to the end of the extra unemployment benefits.