“The overall mortgage forbearance rate increased three basis points in November and has now risen for six consecutive months,” said vice president of industry analysis Marina Walsh, CMB.
According to the survey, 51.3% of the borrowers went into forbearance because of short-term issues such as job loss, death, divorce, or disability, and 46.0% attributed it to natural disasters. The number of borrowers remaining in forbearance for COVID-19 reasons stood at 2.8%. Most loans in forbearance (71.4%) are at the plan stage, followed by 16.5% extensions and 12.1% re-entries.
“By investor type, Ginnie Mae loans are showing the greatest variance, with an increase of 72 basis points over the six-month period. That is compared to 11 basis points for Fannie Mae and Freddie Mac loans, and portfolio and PLS loans, respectively,” Walsh added.
There is some weakening in performance of servicing portfolios and loan workouts compared to one year ago, Walsh observed. In the wake of natural disasters and slowing in the labor market, borrowers with government loans tend to be impacted more than conventional borrowers.
Current loans in servicing portfolios are at 95.22%, down 22 basis points from the previous month, October, and down 49 basis points from the prior year.
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