by Calculated Risk on 11/20/2023 04:37:00 PM

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 0.29% in October

The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey revealed that the total number of loans now in forbearance decreased by 2 basis points from 0.31% of servicers’ portfolio volume in the prior month to 0.29% as of October 31, 2023. According to MBA’s estimate, 145,000 homeowners are in forbearance plans. Mortgage servicers have provided forbearance to approximately 8 million borrowers since March 2020.

In October 2023, the share of Fannie Mae and Freddie Mac loans in forbearance remained flat at 0.18%. Ginnie Mae loans in forbearance decreased 5 basis points to 0.52%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 3 basis points to 0.32%.

“For the first time since MBA began tracking the reasons for forbearance in October 2022, temporary hardships such as job loss, death, and divorce represent a larger share of loans in forbearance by reason than a COVID-19 hardship,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “This upward trend will continue, as Fannie Mae and Freddie Mac sunset the use of COVID-19 as a reason for delinquency starting in November 2023,[1] and FHA’s COVID-19 forbearance period ends at the end of November 2023[2].”

Added Walsh, “Forbearance is still an option for many distressed homeowners, but in most cases, the requirements to obtain a forbearance will not be as streamlined as they were during the pandemic.”
emphasis added

Click on graph for larger image.

This graph shows the reasons for forbearance: COVID-19, Naturnal Disaster, other Temporary Hardship.

From the MBA:

• By reason, 45.4% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability; while 43.3% of borrowers are in forbearance because of COVID-19. Another 11.3% are in forbearance because of a natural disaster.

At the end of October, there were about 145,000 homeowners in forbearance plans.