After falling 23 basis points a week ago, the pace of coronavirus forbearance mortgages dropped another 23 basis points between August 3 and 9, according to the Mortgage Bankers Association.
The interest rate fell for the ninth straight week, with an estimated 7.21% of all outstanding loans – or an estimated 3.6 million – included in forbearance plans, compared with 7.44% and about 3.7 million the week before. The proportion of forborne loans held by independent mortgage lenders fell from 7.71% to 7.42%, while depositaries fell from 7.63% to 7.49% over the same period.
The leniency portion of the two compliant mortgages – those bought by Fannie Mae and Freddie Mac – and the Ginnie Mae loans – the Federal Housing Administration, Department of Veterans Affairs, and U.S. Department of Agriculture – outpaced the overall decline.
The compliant percentage fell 25 basis points from 5.19% to 4.94%, the first time it has fallen below 5% since April. Ginnie Mae's stake fell 52 basis points from 10.06% to 9.54%.
"Conventional mortgage borrowers have done slightly better during the current crisis, and to date there has been no evidence that the risk for the GSEs is increasing," said Mike Fratantoni, senior vice president and chief economist of the MBA, in a press release.
"The decline in Ginnie Mae forbearance loans was again due to takeovers of criminal loans from Ginnie Mae pools, which resulted in these FHA and VA loans being classified in the Portfolio category. This is a sign for more FHA and VA borrowers facing a problem Very tough job market, more Ginnie Mae borrowers forbearance, "Fratantoni wrote.
Private label stocks and portfolio loans – products not covered by the Coronavirus Relief Act – rose from 10.12% to 10.34% this week.
Forbearance inquiries as a percentage of service portfolio volume decreased from 0.12% to 0.11%, while call center volume as a percentage of portfolio volume increased from 7.8% to 7.9%.
The MBA sample for this week's survey includes a total of 50 servicers with 25 independent mortgage lenders and 23 custodians. The sample also included two subservicers. Based on the number of units, respondents accounted for around 75% or 37.3 million of the outstanding first liens.