The share of mortgages in forbearance declined last month in a "somewhat surprising" result, the Mortgage Bankers Association reported.
The share of loans tracked by the MBA in forbearance fell 7 basis points from December to 0.40% to close January, the trade group posted Monday. Forbearance requests grew to start the year, but exits outweighed that rise and hit the highest level since June 2022, said Marina Walsh, the MBA's vice president of industry analytics.
"This outcome was somewhat surprising given the recent events in California, but it speaks to recovery in other parts of the country affected by natural disasters and the movement of aged government loans out of forbearance," she said in a press release.
The recent blazes in Los Angeles affected areas with over
Another 2.6 million government-sponsored enterprise guaranteed loans were affected by last fall's Hurricane Helene and Hurricane Milton, although the GSEs at the time
The share of GSE loans in forbearance dipped 2 basis points to 0.17% in January, while Ginnie Mae mortgages in forbearance faded 19 basis points to 0.88%. For portfolio loans and private-label securities, that share was flat at 0.40%.
In all, the MBA estimates 200,000 homeowners in forbearance plans. Nationwide, the number of borrowers with permanent loan workouts also grew.
"Today, approximately 6.5 percent of all borrowers – or 3.3 million homeowners – are in a loan workout completed in 2020 or after," said Walsh.
The majority of borrowers are in forbearance for temporary hardships, defined as job loss, death, divorce or disability. A third cited natural disasters, while 3% attributed their situation to Covid-19.
Independent mortgage banks had a larger share of loans in forbearance at 0.34% of their portfolio volume, compared to depositories at 0.38%.
