Mortgages in Forbearance Decline in Last Week of September

The share of mortgages in forbearance continued to decline in the last week of September, according to the latest report from the Mortgage Bankers Association.

The MBA’s Forbearance and Call Volume Survey found that the total number of loans now in forbearance nationwide decreased from 6.87 percent of servicers’ portfolio volume in the prior week to 6.81 percent as of Sept. 27. The MBA estimates 3.4 million homeowners are in forbearance plans.

“As of the end of September, there continues to be a slow and steady decrease in the share of loans in forbearance – driven by consistent declines in the GSE loan share – and a persistently high amount in the Ginnie Mae portfolio,” MBA SVP and Chief Economist Mike Fratantoni  said in a statement. “The significant churn in the labor market now, more than six months into the pandemic, is still causing financial distress for millions of homeowners. As a result, more than 70 percent of loans in forbearance are now in an extension.”

The share of Fannie Mae and Freddie Mac loans in forbearance dropped for the 17th week to 4.39 percent. Ginnie Mae loans in forbearance increased to 9.16 percent, while the forbearance share for portfolio loans and private-label securities decreased to 10.39 percent. The percentage of loans in forbearance for depository servicers decreased to 7.03 percent, and the percentage of loans in forbearance for independent mortgage bank servicers decreased to 7.19 percent.