The U.S. forbearance rate measuring the share of mortgages with suspended payments fell slightly to 5.9% last week, according to the Mortgage Bankers Association.
Though the rate fell 2 basis points, the decline has begun to slow after two weeks of what MBA’s chief economist Mike Fratantoni called “a flurry of borrowers” exiting as they reached the six-month mark.
The decline was largely driven by a 5-basis-point drop in Fannie Mae and Freddie Mac loans that knocked the GSEs’ rate of forbearance down to 3.72% – the 20th consecutive week the enterprises’ rate has fallen.
However, the GSEs’ drop was offset by the rate for Ginnie Mae loans, which include loans backed by the Federal Housing Administration, rising 3 basis points to 8.17%, and the forbearance share for portfolio loans and private-label securities (PLS) increasing by 4 basis points to 8.90%.
“There continues to be a steady improvement for Fannie Mae and Freddie Mac loans, but the forbearance share for Ginnie Mae, portfolio, and PLS loans all increased. This is further evidence of the unevenness in the current economic recovery,” Fratantoni said. “The housing market is booming, as shown by the extremely strong pace of home sales last week. However, many homeowners continue to struggle, as the pace of the job market’s improvement has waned.”
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In a recent bid for stability, the FHA extended its initial forbearance request for single-family homeowners through Dec. 31. The Federal Housing Finance Agency followed suit, announcing it would continue to buy qualified loans in forbearance through Nov. 3.
According to the MBA report, an estimated 3 million homeowners are in forbearance plans, with approximately 25.02% of total loans in forbearance in the initial stage and 73.14% in a forbearance extension. The remaining 1.84% are forbearance re-entries, the MBA said.
The volume of calls from mortgage borrowers to the servicers handling their home loans increased last week to 8.9%, measured as a share of overall servicing portfolio, from 8.2% in the prior week, the MBA report said.