Abstention plans drop below 5%

The total number of loans now forborne fell by nine basis points, from 5.05% of managers’ portfolio volume to 4.96%, according to the latest Mortgage Bankers Association (MBA) forbearance and call volume survey. The MBA estimates that approximately 2.5 million US homeowners are currently on forbearance plans.

“The share of loans in forbearance fell for the fourth week in a row, falling below 5% for the first time in a year. New forbearance requests remained at their lowest level since last March, and the pace of outputs increased, “said Mike Fratantoni, Senior Vice President and Chief Economist of MBA. “More than 17% of borrowers on forbearance extensions have now passed the 12-month mark.”

By type of investor, the share of Fannie Mae and Freddie Mac (GSE) loans in forbearance decreased compared to the previous week, from 2.83% to 2.77%, while the share of Ginnie Mae loans in abstention decreased from 7.03% to 6.83% over the previous week.

By stages, 13.8% of the total forbearance loans were at the initial stage of the forbearance plan, while 83.4% are in extension forbearance. The remaining 2.8% represent income from abstention.

Among the cumulative abstentions for the period from June 1, 2020 to March 21, 2021:

  • 9% represented borrowers who continued to make their monthly payments during their forbearance period.
  • 5% resulted in a loan deferral / partial claim.
  • 8% resulted in reinstatements, in which the overdue amounts are reimbursed when the abstention is terminated.
  • 1% represented borrowers who had not made all of their monthly payments and walked out of forbearance without a loss mitigation plan in place yet.
  • 3% resulted in a loan modification or a trial loan modification.
  • 6% resulted in loans being repaid either by refinancing or by selling the house.
  • The remaining 1.8% resulted in redemption plans, short sales, acts in lieu or other reasons.

“Many owners need this support, although there are growing signs that the pace of economic activity is accelerating as the vaccine rollout continues,” said Fratantoni. Those who have continued difficulties due to the pandemic and wish to extend their forbearance beyond the 12 month point should contact their service agent. Agents cannot automatically extend forbearance conditions without the borrower’s consent. “

The abstention figures continuing their post-pandemic slide, Black knight found that the national mortgage delinquency rate edged up in February from 5.85% to 6.0%, after eight consecutive months of improvement. On a month-to-month basis, the default rate (loans 30 days or more past due, but no foreclosure) increased 2.61% in February, with a year-over-year change of 83 , 03%.

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Todd Wurtsbach

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