by Calculated Risk on 8/21/2023 04:14:00 PM

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 0.39% in July

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 5 basis points from 0.44% of servicers’ portfolio volume in the prior month to 0.39% as of July 31, 2023. According to MBA’s estimate, 195,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 7.9 million borrowers since March 2020.

In July 2023, the share of Fannie Mae and Freddie Mac loans in forbearance decreased 1 basis point to 0.20%. Ginnie Mae loans in forbearance decreased 13 basis points to 0.80%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 7 basis points to 0.45%.

“The prevalence of forbearance plans has dramatically dropped since 2020, and the reasons that borrowers are in forbearance are changing,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “About two-thirds of borrowers are still in forbearance because of the effects of COVID-19, but a growing share of borrowers are in forbearance for other reasons that cause temporary hardship such as financial distress or natural disasters. With the COVID-19 national emergency lifted, Fannie Mae and Freddie Mac recently announced the retirement of certain COVID-19 flexibilities relating to forbearance plans and workouts.[1]”
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.

The share of forbearance plans has been decreasing and declined to 0.39% in July from 0.44% in June.

At the end of July, there were about 195,000 homeowners in forbearance plans.