In its monthly Loan Monitoring Survey released this week, the Mortgage Bankers Association found that the total number of loans now in forbearance decreased by 12 basis points from 1.3 percent of servicers’ portfolio volume in January to 1.18 percent in February.

The MBA estimates that 590,000 homeowners are in forbearance plans, down from an estimated 650,000 at the end of January. The share of borrowers who are current on their mortgage payments and not in delinquency or foreclosure has increased by more than three percentage points over the past year, according to the MBA.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 8 basis points in January to 0.56 percent. Ginnie Mae loans in forbearance decreased 10 basis points to 1.5 percent, and the forbearance share for portfolio loans and private-label securities (PLS) declined 30 basis points to 2.72 percent.

Marina Walsh, the MBA’s vice president of industry analysis, said in a statement that overall mortgage performance saw positive results 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,” Walsh said. “Finally, the percentage of borrowers with existing loan workouts who were current on their mortgage payments improved for the first time since June 2021.”

Walsh added that these results in the shortened month of February were especially favorable since borrowers have fewer days to make payments, typically leading to a dip in performance.

“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,” Walsh said.

The MBA said 30.1 percent of total loans in forbearance are in the initial forbearance plan stage, while 57 percent are in a forbearance extension. The remaining 12.9 percent are forbearance re-entries, including re-entries with extensions.

MBA: More Borrowers Current on Mortgage Payments

by Banker & Tradesman time to read: 1 min