The total number of mortgage loans now in forbearance fell by 6 basis points month-over-month to 0.33% as of Aug. 31, according to data from the Mortgage Bankers Association (MBA). Roughly 165,000 homeowners are currently in forbearance plans.
During August, the share of Fannie Mae and Freddie Mac loans in forbearance decreased 1 basis point to 0.19% while Ginnie Mae loans in forbearance decreased 15 basis points to 0.65%. The forbearance share for portfolio loans and private-label securities decreased 6 basis points to 0.39%.
As for the reason for being in forbearance, 60.4% of borrowers cited the tumult from Covid-19 while 7.2% cited a natural disaster. The remaining 32.4% of borrowers are in forbearance for other reasons such as temporary hardships created by job loss, death, divorce, disability, and other factors.
When measured by stage, 39.7% of total loans in forbearance are in the initial forbearance plan stage, while 51.6% are in a forbearance extension. The remaining 8.6% are forbearance re-entries, including re-entries with extensions.
“The forbearance rate is just 8 basis points shy of where it was at the beginning of March 2020, which indicates that most homeowners have recovered from the pandemic,” said Marina Walsh, MBA’s vice president of industry analysis. “While there was a monthly decline in the performance of post-forbearance workouts in August, overall mortgage servicing portfolios remain resilient. Compared to other credit types with weaker performance, the percentage of home mortgages that are performing is holding steady at a non-seasonally adjusted 96%.”
