Service Forbearance portfolio volume has decreased at the highest rate in a year. As per the latest Mortgage Bank Association(MBA) and call volume survey, the total number of loans in forbearance decreased by 27 basis points by the 3rd of October. That set the rate at 2.62 percent lower than the previous week’s rate of 2.89 percent. The MBA reports estimate that around 1.3 million homeowners currently remain active in forbearance plans.
Over the past weeks, there has been a decline in all categories and the most notable being the Ginnie Mae portfolio which has gone down by 41 basis points to 2.94 percent, the largest decline since the Covid- 19 pandemic hit and has left it at a percentage below 3 percent. Freddie Mae and Freddie Mac loans have also dropped by 17 basis points from 1.38% to 1.21%.
The loans and private-label securities show a decline of 35 basis points to 6.42%. In depository servicers, the percentage declined by 24 basis points to 2.69%. The independent mortgage bank loans in forbearance also fell by 37 basis points to 2.82%. Mike Fratantoni, the senior vice president and chief economist at the Mortgage Bankers Association, said in a statement that many borrowers reached the expiration of their forbearance term and the pace of exits had climbed to the fastest pace in over a year. He expects that with the drop in unemployment rate, the rising wages, and the abundant job openings that the borrowers’ forbearance exit rate will rise even more. He said that “Job growth was weaker than expected in September, reflecting the challenges from the Delta variant, ongoing supply chain issues, and the resulting slowdowns in the workplace. However, the drop in the unemployment rate, rising wages, and abundant job openings will continue to help support the housing market, including helping borrowers exit forbearance successfully in the weeks ahead.”
The economist also added saying, “Payment performance has remained steady for those who have exited forbearance into a workout since 2020, with more than 85% of those borrowers current as of October. It also continues to be striking that so many homeowners in forbearance have continued to make their payments. Almost 16% of borrowers in forbearance as of October 3 were current.” During the past year, the Mortgage Bankers Association records have revealed that 28.8% of exits resulted in a loan deferral or partial claim. 21.3% represented the borrowers who continued with their payments during the forbearance period. Although, 16.5% were borrowers who didn’t make their monthly payments and had no loss mitigation plans. The survey shows that 13.3% of total loans in forbearance were in the initial stage last week, 77.5% were in forbearance, and the remaining 9.2% were re-entries.
Every change in the real estate world affects the housing market in different ways. The forbearance exit may not go down soon. As a homeowner, this is the right time for you to head on to The Power Is Now Media Inc. We are the best when it comes to home ownership services.
About The Power Is Now Media Inc.
The Power Is Now Media Inc. is an advocate for the empowerment of the minority communities all around the United States. We engage in various thoughts of leaders to make sure that you are equipped with knowledge about our economy. We have partnered with First Bank to provide you with products and services that will help you prepare better for the future. We are also advocating for first-time home buyers. The Power Is Now Media Inc can help make your homeownership dream a reality. Go to www.neverrentagain.com and get started today!
Eric Lawrence Frazier MBA DRE,
Vice President and Mortgage Advisor of First Bank,
NMLS 461807.
President and CEO of The Power Is Now Media Inc.
REFERENCE
https://www.housingwire.com/articles/forbearance-declines-at-the-fastest-pace-in-a-year/
https://dsnews.com/daily-dose/10-11-2021/forbearance-exits-hit-highest-pace-in-more-than-a-year
https://dsnews.com/daily-dose/09-10-2021/how-the-moratoriums-end-is-affecting-foreclosure-activity
