Forbearances declined further in March and are now closing in on just 1% of total servicing volume, according to the Mortgage Bankers Association.
The number of forborne mortgages fell to 525,000, a 1.05% share of serviced loans, compared to 590,000 and
Among borrowers who entered forbearance plans at some point since 2020, the share now considered current — either after making regular payments or undergoing a combo payment-deferral and partial-claim option or other modification program — increased to 83.7% compared to 82.8% in February.
“The share of loans in forbearance continues to dwindle and is just 5 basis points shy of hitting 1% — or 500,000 homeowners — after peaking at 4.3 million borrowers in June 2020,” said Marina Walsh, MBA’s vice president of industry analysis. “It has been a remarkable recovery for many homeowners in less than two years.”
Declines occurred across all investor types, with the percentage of forborne portfolio loans and private-label securities seeing the largest monthly drop of 28 basis points. Forbearances in the investor pool now account for 2.44% of the category’s volume. Meanwhile, the share of Fannie Mae and Freddie Mac loans in forbearance fell 7 basis points and is currently at 0.49% relative to their total volume. Ginnie Mae loans in forbearance dropped compared to the prior month as well, declining to 1.38%.
Of the March forbearance exits, 30.8% agreed to a payment deferral or partial claim, transferring all or part of missed payments to the end of their terms, while 29.8% opted for a loan modification. However, 17.7% of exiting borrowers left with
While gains in
Western homeowners have had the most success with mortgage payments, according to the MBA. The five states with the highest share of loans considered current in March were Idaho, Washington, Colorado, Utah and Oregon. On the other end, states with the lowest share of current loans relative to servicing portfolios included some heavily impacted by