GSE abstention exits at slowest pace since August

While around 1.1 million homeowners remain on forbearance plans, the latest Mortgage Bankers Association (MBA) forbearance and call volume survey shows that as of October 24, 2021, the total number of loans in forbearance fell by six basis points, from 2.21% of the volume of the repairer portfolio the previous week to 2.15%.

In terms of the type of loan:

  • Forborne GSE (Fannie Mae and Freddie Mac) loans fell three basis points from 1.00% to 0.97%
  • Ginnie Mae’s forborne loans fell seven basis points from 2.72% to 2.65%
  • Private Label Securities (PLS) fell eight basis points from 5.21% to 5.13%
  • Independent mortgage bank (IMB) services saw their volume drop by six basis points from the previous week, from 2.49% to 2.43%.
  • Custodian agents saw their share decrease by four basis points, from 2.11% to 2.07%

By stage, 15.6% of loans in forbearance were at the initial stage of the forbearance plan, while 74.2% were in extension of forbearance. The remaining 10.2% represented inflows of abstention, including inflows with extension.

“For the first time since March 2020, the share of Fannie Mae and Freddie Mac loans in forbearance fell below 1%. A slight drop for this category of investors has been accompanied by equally small drops for Ginnie Mae and wallet / PLS loans, ”Mike said. Fratantoni, SVP of the MBA and Chief Economist. “Forbearance outflows slowed at the end of October at the slowest pace since late August. With so many borrowers reaching the end of their 18-month forbearance term, we expect a sustained rate of outflows in November. “

Among the cumulative withdrawals from abstention for the period from June 1, 2020 to October 24, 2021, at the time of the withdrawal from abstention:

  • 29.1% resulted in a loan deferral / partial claim
  • 20.6% represented borrowers who continued to make their monthly payments during their forbearance period
  • 16.7% represented borrowers who had not made all of their monthly payments and who walked out of forbearance without a loss mitigation plan in place yet
  • 13.1% resulted in a loan modification or trial loan modification
  • 12.0% resulted in reinstatements, in which overdue amounts are reimbursed when the forbearance is terminated
  • 7.1% resulted in loans being repaid either through refinancing or the sale of the house
  • 1.4% resulted in repayment plans, short sales, acts in lieu or other reasons

As the country’s economic landscape improves, the US workforce is registering gains, as last week the US Department of Labor announced the leading figure for seasonally adjusted initial jobless claims was 281 000, a decrease of 10,000 from the level of the previous week, and the lowest level of initial requests since March 14, 2020, when it was 256,000.

In terms of weekly service call center volume, the MBA reports that abstention-related calls decreased from the previous week, from 7.7% to 5.9%, with the average response speed falling from 2.1 minutes to 1.5 minutes and the average call duration. decreasing slightly from 7.9 minutes to 7.8 minutes.

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