by Calculated Risk on 2/08/2021 04:00:00 PM

Note: This is as of January 31st.

From the MBA: Share of Mortgage Loans in Forbearance Declines to 5.35%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 3 basis points from 5.38% of servicers’ portfolio volume in the prior week to 5.35% as of January 31, 2021. According to MBA’s estimate, 2.7 million homeowners are in forbearance plans.
...
“The share of loans in forbearance decreased at the end of January across all investor categories. Almost 14 percent of homeowners in forbearance were reported as current on their payments at the end of last month, but the share has declined nearly every month from 28 percent in May,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “While new forbearance requests increased slightly at the end of January, the rate of exits picked up somewhat but remained much lower than in recent months. We are anticipating a sharp increase in exits in March and April as borrowers hit the 12-month expiration of their forbearance plans.”

Fratantoni added, “The job market rebounded slightly in January following a decline in December, but there are still 6.5 percent fewer jobs in the U.S. economy compared to February 2020. The proportion of long-term unemployed also remains troubling, with 4 million people who have been actively looking for work for 27 weeks or more. These are the homeowners who are likely to still be in forbearance and need additional support until the job market recovers to a greater extent.”
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, then trended down - and has mostly moved sideways recently.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.06% to 0.07%."