Mortgage

Mortgage reunions fall for the second time: MBA

The rate of coronavirus forbearance mortgages has declined in recent weeks and decreased an additional basis point between June 15-21, according to the Mortgage Bankers Association.

Approximately 8.47% of all outstanding loans or an estimated 4.2 million mortgages were in forbearance plans as of the third week in June, compared to 8.48% and approximately 4.2 million in the previous week's MBA report.

"The overall proportion of leniency loans declined for the second consecutive week, led by the third consecutive decline in GSE loans," said Mike Fratantoni, senior vice president and chief economist at the MBA, in a press release.

"Many borrowers were initially granted a three-month grace period, and by June 21, 17% of the grace loans had been extended, most of which were Ginnie Mae loans. The number of grace requests remains fairly low in mid-June. The real estate market recovery is probably one of the factors that give potential home buyers and existing homeowners confidence in these difficult times. "

The share of overdrafts with independent mortgage service providers rose from 8.4% to 8.42% during this period. The depositaries reduced the total share from 9.15% to 9.09%.

The share of compliant mortgages – bought by Fannie Mae and Freddie Mac – in forbearance decreased from 6.31% to 6.26%. For private label securities and portfolio loans – products that were not treated under the Coronavirus Act – the proportion of forbearance increased from 9.99% the previous week to 10.07%.

Ginnie Mae's mortgages – Federal Housing Administration, Department of Veterans Affairs, and U.S. Department of Agriculture products – remained unchanged at 11.83% for the third consecutive week, maintaining the highest percentage of lenient investor-type credit.

Forbearance requests as a percentage of service portfolio volume decreased from 0.15% on June 21 to 0.14% on June 14. However, the call center volume as a percentage of the portfolio volume increased from 7.7% to 7.8%.

However, if Black Knight's recent projection up to June 23 serves as an indicator, leniency in the next MBA report could increase.

The MBA's sample for this week's survey includes a total of 54 servicers, including 29 independent mortgage bankers and 23 depositaries. The sample also included two subservicers. Based on the number of units, the respondents accounted for almost 76% or 38.2 million of the outstanding first liens.

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