The Mortgage Bankers Association reveals that the coronavirus-related mortgage forbearance growth had its biggest drop of 8 basis points over the June 22-June 28 week. For the last week of June, nearly 4.2 million mortgages were under forbearance; this is 8.39% of the total loans outstanding. The percentage is less than 8.47% posted a week prior. For the banks servicing independent mortgages, forbearance loans fell from 8.42% to 8.33%.
Mike Fratantoni, Senior Vice President and Chief Economist of MBA, suggested that the forbearance numbers are only expected to come down, now that the job scene is unexpectedly improving across the country. The forbearance numbers, Fratantoni believes, are likely to come down even further in the weeks coming up next and the decrease may be spread across the counter, including Ginnie Mae and GSE loans.
To quote him, “Looking at the mix of loans that are exiting forbearance, we are seeing a higher share exiting into deferral options and modifications, and somewhat fewer simply opting out of a forbearance plan.”
The conforming mortgages- part of the ‘Freddie’ and ‘Fannie’ purchase- had their forbearance percentage decreased from 6.26% to 6.17% over the same period.
Sitting tight at 11.83% for three consecutive weeks, the products of FHA, VA, and the U.S. Department of Agriculture Rural Housing Service (Ginnie Mae mortgages) came down to 11.72%.
In terms of percentage of the total volume of servicing portfolio, forbearance requests for the week ending June 28 came down to 0.12% from 0.15% posted for the week ending June 21.