While the number of homeowners in forbearance remained unchanged last month, the Mortgage Bankers Association said it saw signs of weakness in November’s data.

In its monthly Loan Monitoring Survey released yesterday, the MBA found that the total number of loans now in forbearance remained at 0.70 percent in November. The MBA estimates that 350,000 homeowners are in forbearance plans.

Even though the forbearance rate was unchanged and the performance of serviced loans stayed mostly flat, MBA’s Vice President Of Industry Analysis Marina Walsh said November’s data showed “pockets of weakness.”

“The forbearance rate for Ginnie Mae loans increased for the fourth consecutive month, and the overall performance of the portfolio declined for the third consecutive month,” Walsh said in a statement. “Furthermore, the performance of government post-forbearance workouts also weakened.”

The share of Fannie Mae and Freddie Mac loans in forbearance increased 1 basis point to 0.32 percent. Ginnie Mae loans in forbearance increased 5 basis points to 1.46 percent, while the forbearance share for portfolio loans and private-label securities declined 6 basis points to 0.97 percent.

The percent of borrowers current on their mortgage – not delinquent or in foreclosure – was 95.69 percent in November compared to 95.70 percent in October.

For depository institutions, 0.46 percent of their loan portfolio is in forbearance compared to 0.47 percent in October, while 0.95 percent of independent mortgage banks’ portfolios is in forbearance compared to 0.96 percent in October.

The MBA said that 37.8 percent of total loans in forbearance were in the initial forbearance plan stage in November compared to 36.7 percent in October. The remaining loans include 50.1 percent that were in a forbearance extension and 12.1 percent that were forbearance re-entries, including re-entries with extensions.

“With many indicators pointing to a recession and higher unemployment in 2023, many of the most vulnerable homeowners will be those with FHA, VA, or other government loans,” Walsh said. “Loss mitigation options may help to ease the financial hardship for these homeowners.”

MBA Sees ‘Pockets of Weakness’ in Forbearance Data

by Banker & Tradesman time to read: 1 min