Report: Forbearances “Reach a Floor”

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The Mortgage Bankers Association (MBA) has released its latest Loan Monitoring Survey as of December 31, 2022, and found that the total number of loans now in forbearance remained flat relative to the prior month at 0.70%. The MBA estimates that approximately 350,000 homeowners nationwide are in forbearance plans.

“For three consecutive months, the forbearance rate has remained flat—an indicator that we may have reached a floor on further improvements,” said Marina Walsh, CMB, MBA’s VP of Industry Analysis. “New forbearance requests and re-entries continue to trickle in at about the same pace as forbearance exits. The overall performance of servicing portfolios was also flat compared to the previous month, but there was some deterioration in the performance of Ginnie Mae loans.”

According to the MBA, by stage, 37.9% of total loans in forbearance were in the initial forbearance plan stage, while 49.3% were in a forbearance extension. The remaining 12.8% represented forbearance re-entries, including re-entries with extensions.

By loan type, the share of Fannie Mae and Freddie Mac (GSE) loans in forbearance decreased one basis point from 0.32% to 0.31% month-over-month, while Ginnie Mae loans in forbearance decreased one basis point from 1.46% to 1.45%. The forbearance share for portfolio loans and private-label securities (PLS) increased three basis points from 0.97% to 1%.

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