Share of forbeared mortgages decreases for the fourth week in a row
The share of mortgage loans in abstention fell for the fourth consecutive week to 8.18% according to the Mortgage Bankers AssociationForbearance and call volume survey. The approximately 4.2 million MBA owners are now forborne.
Broken down by investor type, Fannie Mae and Freddie mac loans fell for the fifth week in a row to 6.07%, according to the report.
Ginnie Mae mortgages – mainly backed by Federal Housing Administration and the Veterans Administration – fell to 10.56%. As loans were withdrawn from Ginnie Mae’s pools and into bank portfolios, the share of portfolio loans and private label securities withheld increased to 10.93%.
“These buybacks allow service providers to stop advancing principal and interest payments, and work with borrowers in the hope that they can start paying again before they are re-securitized into the Ginnie Mae pools. “said Mike Fratantoni, senior vice president and chief economist of MBA. .
The loan forbearance percentage for depository services and independent mortgage banking services also fell to 8.80% and 8.10%, respectively.
Although more than 10% of borrowers entered into a deferral plan to exit forbearance, that figure was down from 16% the week before, according to the report.
“Forty-three percent of forbidden loans are now extended beyond their original forbearance period,” Fratantoni said. “For those coming out of forbearance in the next few months, we expect many borrowers on GSE loans to use the deferral option.”
Prior to the shutdown of the US economy by COVID-19, the MBA reported that the overall abstention rate was 0.25%.
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