Forborne Mortgage Numbers Drop Again; Albeit at a Lower Rate
The number of mortgages hitting forbearance has come down for a 6th consecutive week. The speed of fall has slowed down though. Forbearances triggered by the Coronavirus declined by 6 basis points (7.8% to 7.74%) between 13th and 19th July, confirms the Mortgage Bankers Association. For the independent mortgage providers, the loans sitting in forbearance climbed to 7.85% from 7.83%.
The MBA’s senior vice president (and chief economist) Mike Fratantoni suggested, “Although the GSE portfolio of loans in forbearance should continue to improve, Ginnie Mae’s portfolio saw an uptick of both loans in forbearance and borrowers requesting forbearance.”. He further added, “The high level of unemployment claims in recent weeks may be playing a role, as weakness would likely impact Ginnie Mae’s portfolio first.”
Forborne conforming mortgage loans fell to 5.49% from 5.64%. Meanwhile, Ginnie Mae forbearance numbers rose by 1 basis point. Nearly $20 billion of over-90-days-past Ginnie Mae loans have been bought by investors (like Wells Fargo) leading to many FHA and VA loans turning into portfolio loans. This has brought a spike to the percentage of forborne portfolio loans.
In terms of the servicing portfolio volume, the requests for forbearance sat at 0.13%. It is a straight three weeks of no movement. Call center volume, in terms of servicing portfolio volume, has meanwhile shot up to 9% from 8.3%.