Forbearances decline overall, but share of Ginnie Mae loans increased

After the pace of mortgages going into coronavirus-related forbearance stayed static following 10 weeks of declines, the rate dipped 4 basis points between Aug. 24 and Aug. 30, according to the Mortgage Bankers Association.

Mortgages sitting in forbearance plans now represent 7.14% — approximately 3.6 million — of all outstanding loans compared to 7.2% the week prior. The share of forborne loans at independent mortgage bank servicers remained flat at 7.41%, while depositories dragged down the average, dropping to 7.4% from 7.49% over that time frame.

"The share of Ginnie Mae loans in forbearance increased again this week, as the current economic crisis continues to disproportionately impact borrowers with FHA and VA loans," Mike Fratantoni, the MBA's senior vice president and chief economist, said in a press release. "As a result, IMB servicers, which have roughly one-third of their portfolio with Ginnie Mae, had a forbearance share that was unchanged, while depositories, which have a larger share of GSE and portfolio loans, saw a decrease."

The forbearance share of conforming mortgages — those purchased by Fannie Mae and Freddie Mac — descended for the 13^thstraight week to 4.8% from 4.88%. Ginnie Mae loans — Federal Housing Administration, Department of Veterans Affairs and U.S. Department of Agriculture Rural Housing Service products — rose to 9.62% from 9.58%.

Private-label securities and portfolio loans — products not addressed by the coronavirus relief act — edged lower after two weeks of increases, going to 10.43% from 10.44%.

Forbearance requests as a percentage of servicing portfolio volume crept lower to 0.09% from 0.1%, while call center volume as a percentage of portfolio volume held at 7.2%.

"The labor market continued to healin August, with strong job growth and a large decline in the unemployment rate," Fratantoni continued. "However, the economy still faces an uphill climb and remains far away from full employment. High unemployment, and jobless claims consistently around 1 million a week, continue to cause financial strain for some borrowers — and especially for those who work in industries hardest hitby the pandemic."

The MBA's sample for this week's survey includes a total of 49 servicers with 26 independent mortgage bankers and 21 depositories. The sample also included two subservicers. By unit count, the respondents represented about 75%, or 37.3 million, of outstanding first-lien mortgages.