According to the Mortgage Bankers Association, the independent rebound in mortgage bankers resulted in a weekly decline in the leniency rate.
Coronavirus forbearance mortgage counts followed two weeks of the decline, falling another 7 basis points between February 8 and 14.
Home loans in forbearance plans account for 5.22% – about 2.6 million homeowners – of all outstanding mortgages, compared with 5.29% the week before. This is the lowest forbearance rate since hitting 3.74% in the week ended April 5. The proportion of forborne loans to independent mortgage lenders decreased from 5.69% to 5.54%, while depositaries rose from 5.26% to 5.28%.
"Policy makers and the mortgage industry helped make this [strong real estate market] possible during the pandemic by indulging millions of homeowners," MBA SVP and Chief Economist Mike Fratantoni said in a press release. "The decision to extend the allowable duration of forbearance plans should allow for a smoother transition this year as the labor market continues to recover."
Over the past two weeks, both President Biden and the Federal Housing Finance Agency have postponed the forbearance grace periods by three months to June 30th. While the expanded forbearance protection is designed to help distressed borrowers, the recent Black Knight report suggests that it will likely hinder the recovery rate.
Ginnie Mae Forbearance Loans – Federal Housing Administration, Department of Veterans Affairs, and Department of Agriculture Rural Housing Products – declined from 7.34% to 7.32%.
Compliant mortgages – the ones bought by Fannie Mae and Freddie Mac – remain the healthiest type of loan, going from 3.01% to 2.97%. Meanwhile, private label stocks and portfolio loans – products not regulated under the Coronavirus Relief Act – fell from 8.89% to 8.76%.
15.9% of all forborne mortgages are in the initial forbearance stages, while 81.6% have moved to advanced plans. The remaining 2.5% re-entered in forbearance after leaving previously.
Forbearance requests as a percentage of service portfolio volume decreased to 0.06% from 0.07% the previous week. The call center volume as a percentage of the portfolio volume rose slightly from 9.2% to 9.3%.
The MBA sample for this week's survey includes a total of 48 servicers with 25 independent mortgage lenders and 21 custodians. The sample also included two subservicers. In relation to the number of units, the respondents accounted for around 74% or 37.1 million of the outstanding first liens.