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With the unemployment rate remaining low, more borrowers were current on their mortgage payments in April compared to the first three months of 2022, according to the Mortgage Bankers Association.
In its monthly Loan Monitoring Survey released this week, the MBA found that the total number of loans now in forbearance decreased by 11 basis points from 1.05 percent of servicers’ portfolio volume in March to 0.94 percent in April. The MBA estimates that 470,000 homeowners are in forbearance plans.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 6 basis points to 0.43 percent. Ginnie Mae loans in forbearance decreased 9 basis points to 1.29 percent, and the forbearance share for portfolio loans and private-label securities (PLS) declined 29 basis points to 2.15 percent.
“With the number of borrowers in forbearance decreasing to less than half a million, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020,” Marina Walsh, MBA’s vice president of industry analysis, said in a statement. “Servicers are expected to continue making small incremental inroads to the remaining loans in forbearance.”
The MBA said that 28.9 percent of total loans in forbearance are in the initial forbearance plan stage, while 58.1 percent are in a forbearance extension. The remaining 13 percent are forbearance re-entries, including re-entries with extensions.
Despite potential headwinds such as high inflation and stock market volatility, the MBA said, the percentage of borrowers current on their mortgage payments reached its highest level since the start of 2022,
“The best indicator of loan performance is overall national employment,” Walsh said. “The U.S. unemployment rate is still below 4 percent, leaving borrowers in a good position to make their monthly mortgage payments.”
