Real Estate

Mortgage forbearances increase for first time in 5 weeks

The number of mortgage loans in forbearance increased 1 basis point for the week ending on February 21, 2021, marking the first increase in five weeks according to the Mortgage Bankers Association’s (MBA) weekly forbearance and call volume survey released on Tuesday.

“A small increase in new forbearance requests, coupled with exits decreasing to match a survey low, led to the overall share of loans in forbearance increasing for the first time in five weeks,” MBA Senior Vice President and Chief Economist Mike Fratantoni said in a press release. “The largest rise in the forbearance share was for portfolio and private-label securities (PLS) loans, due to increases for both Ginnie Mae buyouts and other portfolio/PLS loans.”

The number of forbearances for Freddie Mac and Fannie Mae loans remained flat at 2.97 percent, while the number of forbearances for Ginnie Mae loans increased 3 basis points to 7.35 percent. Portfolio loans and private-label securities servicers (+9 basis points to 9.03 percent), independent mortgage bank servicers (+3 basis points to 5.57 percent), and depository servicers (+1 basis point to 5.29 percent) also increased during the same time period.

Although servicing portfolio volume calls decreased week-over-week from 9.3 percent to 7.9 percent, the number of forbearance requests as a percent of servicing portfolio volume remained steady with a minimal 0.01 percent increase to 0.07 percent.

Nearly 16 percent of requests were at the initial forbearance plan stage, 81.9 percent were in a forbearance extension, and 2.5 percent were forbearance re-entries.

Frantantoni said the decline was due to severe winter weather that temporarily shuttered call centers around the South, particularly Texas.

“The winter storm that impacted Texas and other states did lead to some temporary disruptions at servicer call centers, but these centers quickly returned to full operations,” he said.

In the MBA’s Jan. 11 Forbearance and Call Volume Survey, Frantantoni predicted the increase of forbearance increases will continue “for the next few months” as homeowners navigate a fraught employment market.

At the time, mortgage forbearance allowances were set to expire in March; however, the U.S. Department of Housing and Urban Development (HUD), U.S. Department of Veterans Affairs (VA), and U.S. Department of Agriculture (USDA) announced protections have been extended through June 30.

“This includes extending a foreclosure moratorium for homeowners through June 30 and extending a mortgage payment forbearance enrollment window until June 30 for borrowers who wish to request forbearance,” a previous Inman article explained. “The agencies will also provide up to six months of additional mortgage payment forbearance, in three-month increments, for borrowers who entered forbearance on or before June 30, 2020.”

The Federal Housing Finance Agency (FHFA) also announced its own forbearance extensions for Fannie Mae and Freddie Mac loans, which allow borrowers to extend their current forbearance for up to three months.

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