It’s the 19th straight week of forbearance decreases. The MBA estimates that 1.9 million homeowners are currently in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased eight basis points to 1.91%, and Ginnie Mae loans decreased a staggering 32 basis points to 4.78%. The forbearance share for portfolio loans and private-label securities (PLS) increased two basis points to 7.94%.
It’s only the second time since March that both Fannie Mae and Freddie Mac loans in forbearance were reported under 2%, with last week’s 1.99% being the first.
MBA Senior Vice President and Chief Economist Mike Fratantoni noted that forbearance exits increased to the fastest pace since early April, while the mortgage delinquency rate across the entire servicing portfolio declined in June compared to May.
“However, the delinquency rate slightly increased for homeowners who have completed a workout,” Fratantoni said. “Borrowers who are exiting forbearance now are likely to have been in relief for over a year, with almost 60% of borrowers in forbearance extensions of longer than 12 months. These borrowers may face more challenges getting back to making regular payments.”
Recently, the White House said in a statement that three federal agencies that back mortgages — the United States Department of Agriculture (USDA), the Department of Veterans Affairs (VA) and the Department of Housing and Urban Development (HUD) — would extend the pandemic-related foreclosure ban until July 31. The Federal Housing Finance Agency, which oversees Fannie and Freddie, said it will similarly extend its limit through the end of July. This latest extension will be the last one, per the Biden Administration.
By stage, 10.8% of total loans in forbearance are in the initial plan stage, while 82.7% are in a forbearance extension — down from 82.9% last week. The remaining 6.5% are re-entries.