The number of borrowers in forbearance has dropped in less than two years by nearly 4 million in what the Mortgage Bankers Association called a “remarkable recovery.”
In its monthly Loan Monitoring Survey released this week, the MBA said the total number of loans now in forbearance decreased by 13 basis points from 1.18 percent of servicers’ portfolio volume in February to 1.05 percent in March. The MBA estimates that 525,000 homeowners are in forbearance plans, down from an estimated 4.3 million in June 2020.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 7 basis points in March to 0.49 percent. Ginnie Mae loans in forbearance decreased 12 basis points to 1.38 percent, and the forbearance share for portfolio loans and private-label securities (PLS) declined 28 basis points to 2.44 percent.
“March was another month of lower forbearance rates, and a higher share of overall loans and forbearance-related workout loans that are current,” Marina Walsh, MBA’s vice president of industry analysis, said in a statement. “The share of loans in forbearance continues to dwindle and is just 5 basis points shy of hitting 1 percent – or 500,000 homeowners – after peaking at 4.3 million borrowers in June 2020. It has been a remarkable recovery for many homeowners in less than two years.”
The MBA said 29.7 percent of total loans in forbearance are in the initial forbearance plan stage, while 57.2 percent are in a forbearance extension. The remaining 13.1 percent are forbearance re-entries, including re-entries with extensions.
Loans that are current, meaning they are not delinquent or in foreclosure, represented 95.47 percent of servicing portfolio volume in March, up from 94.94 percent in February. In Massachusetts, 96 percent of loans were current.