While the number of homeowners in forbearance continued to decline last month, the forbearance rate for Ginnie Mae loans increased for the first time since 2020, according to the Mortgage Bankers Association.

In its monthly Loan Monitoring Survey released yesterday, the MBA found that the total number of loans now in forbearance decreased by 2 basis points from 0.74 percent of servicers’ portfolio volume in July to 0.72 percent in August. The MBA estimates that 360,000 homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis point to 0.32 percent. Ginnie Mae loans in forbearance increased 6 basis points to 1.32 percent, and the forbearance share for portfolio loans and private-label securities declined 8 basis points to 1.26 percent.

“The overall number of loans in forbearance continues to trickle down, but there was an increase in Ginnie Mae forbearances in August,” Marina Walsh, MBA’s vice president of industry analysis, said in a statement. “From January 2021 through May 2022, the Ginnie Mae forbearance rate was declining – albeit at a slower pace in 2022 compared to 2021. In June and July this year, the rate stayed flat. Last month, Ginnie Mae new forbearance requests and re-entries outpaced forbearance exits and there was a decline in post-forbearance workout performance among government loans. Despite this activity, the overall performance of the Ginnie Mae portfolio still improved to 94.57 percent current.”

The MBA said that 32.1 percent of total loans in forbearance were in the initial forbearance plan stage in August compared to 30.5 percent in July. The remaining loans include 54.4 percent that were in a forbearance extension and 13.5 percent that were forbearance re-entries, including re-entries with extensions.

For depository institutions, 0.52 percent of their loan portfolio is in forbearance, down from 0.56 percent in July, while 0.96 percent of independent mortgage banks’ portfolios is in forbearance, compared to 1 percent in July.

The percent of borrowers current on their mortgage – not delinquent or in foreclosure – was 95.85 percent in August, up from 95.59 percent in July.

MBA: Ginnie Mae Forbearances Increased in August

by Banker & Tradesman time to read: 1 min