Mortgage forbearance growth slows overall, but hits Ginnie Mae hardest

The pace of growth in the number of mortgages with coronavirus-related forbearance has slowed again, as the number of such loans increased by only 20 basis points between May 11 and May 17, according to the Mortgage Bankers Association.

About 8.36% of all outstanding loans or an estimated 4.2 million mortgages sat in forbearance plans as of May 17, compared to 8.16% and 4.1 million the week prior.

The share of loans in forbearance at independent mortgage bank servicers grew at a larger rate, increasing to 8.11% from 7.85% over that period. The rate slowed at depositories, but those forborne loans occupy a larger share, going to 9.13% from 8.99%.

"Although job losses continue at extremely high rates, mortgage servicers are reporting only modest increases in the share of loans in forbearance as of May 17," Mike Fratantoni, the MBA's senior vice president and chief economist, said in a press release.

For the sixth straight week, forbearance requests as a percentage of servicing portfolio volume declined, dropping to 0.28% on May 17 from 0.32% on May 10. Call center volume as a percentage of portfolio volume rose back up to 8.6% from 7.8%.

Ginnie Mae mortgages — Federal Housing Administration, Veterans Affairs and U.S. Department of Agriculture Rural Housing Service products — again claimed the highest percentage of loans in forbearance by investor type, jumping to 11.6% from 11.26%.

"The decline in employment and income is hitting FHA and VA borrowers harder, leading to 11.6% of Ginnie Mae loans currently in forbearance. Forbearance requests declined relative to the prior week, and while call volume picked up, servicers appear well staffed for this volume, as wait times and abandonment rates dropped," Fratantoni said.

The share of conforming mortgages — those purchased by Fannie Mae and Freddie Mac — in forbearance grew to 6.35% from 6.25%. The share of forbearance of private-label securities and portfolio loans — products which were not addressed by the coronavirus relief act — also grew, going to 9.54% from 9.26% the week prior.

The MBA's sample for this week's survey includes a total of 56 servicers comprised of 31 independent mortgage bankers, 23 depositories, plus two subservicers. By unit count, the respondents represented nearly 77%, or 38.3 million, of the outstanding first-lien mortgages.