The mortgage indebtedness fee continues to say no, however extra slowly

The pace of forgiving mortgages shrank for the sixth consecutive week, albeit at a slower pace. According to the Mortgage Bankers Association, coronavirus-related leniencies fell 6 basis points between July 13 and 19.

Approximately 7.74% – or nearly 3.9 million – of all outstanding loans were in forbearance plans, compared to 7.8% and approximately 3.9 million in the previous week's MBA report. The proportion of Forborne Loans with independent mortgage service providers rose from 7.83% to 7.85%, while depositaries decreased from 8.23% to 8.06% over the same period.

"Although the GSE portfolio of forbearance loans should continue to improve, Ginnie Maes' portfolio saw an increase in both indulgence loans and borrowers who required leniency," said Mike Fratantoni, senior vice president and chief economist at the MBA Press release. "The high level of unemployment claims in the past few weeks could play a role as a weakness would likely affect Ginnie Mae's portfolio first."

The leniency rate on compliant mortgages bought by Fannie Mae and Freddie Mac decreased from 5.64% to 5.49%. Ginnie Mae's lending – Federal Housing Administration, Department of Veterans Affairs, and U.S. Department of Agriculture products – rose from 10.26% to 10.27%.

"Due to the large takeovers from Ginnie Mae pools in the past few weeks, many FHA and VA loans are now held by portfolio companies as portfolio loans," said Fratantoni. "For this reason, the proportion of portfolio loans in forbearance has increased and is now usually at a higher level than for Ginnie Mae loans."

Private label securities and portfolio loans – products that are not covered by the Coronavirus Aid Act – continued to play hops, rising from 10.41% to 10.53% this week.

Forbearance requests as a percentage of service portfolio volume remained at 0.13% for the third consecutive week, while call center volume as a percentage of portfolio volume rose again from 8.3% to 9%.

The MBA's sample for this week's survey includes a total of 52 servicers, including 27 independent mortgage bankers and 23 depositaries. The sample also included two subservicers. Based on the number of units, the respondents accounted for approximately 75% or 37.3 million of the outstanding first liens.

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