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MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 1.18% in February"

by Calculated Risk on 3/21/2022 04:00:00 PM

Note: This is as of February 28th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 1.18% in February

The Mortgage Bankers Association’s (MBA) monthly Loan
Monitoring Survey revealed that the total number of loans now in forbearance decreased by 12 basis
points from 1.30% of servicers’ portfolio volume in the prior month to 1.18% as of February 28, 2022.
According to MBA’s estimate, 590,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 8 basis points to 0.56%.
Ginnie Mae loans in forbearance decreased 10 basis points to 1.50%, and the forbearance share for
portfolio loans and private-label securities (PLS) declined 30 basis points to 2.72%

“There were many positive results in overall mortgage performance in February. The percentage of
borrowers in forbearance declined for the 21st consecutive month, and the percentage of borrowers
current on their mortgage payments increased to almost 95 percent – 350 basis points higher than one
year ago. Finally, the percentage of borrowers with existing loan workouts who were current on their
mortgage payments improved for the first time since June 2021,” said Marina Walsh, CMB, MBA’s Vice
President of Industry Analysis. “These three results – the lower forbearance rates and higher
performance rates for both total borrowers and borrowers in workouts – are especially favorable given
that there is typically a dip in mortgage performance in February because of the shortened number of
days to make a payment.”

Added Walsh, “We can credit several factors to the improved performance, including the availability of
viable loss mitigation options, low unemployment that is now below 4.0 percent, strong wage growth,
and rising home equity.”
emphasis added

Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time. The number of forbearance plans is decreasing.

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