The total number of loans in forbearance during July totaled approximately 195,000, according to data from the Mortgage Bankers Association (MBA). This represents a 5-basis-point decline from 0.44% of servicers’ portfolio volume in June to 0.39% in July.
In July 2023, the share of Fannie Mae and Freddie Mac loans in forbearance decreased 1 basis point to 0.20% while Ginnie Mae loans in forbearance decreased 13 basis points to 0.80%, and the forbearance share for portfolio loans and private-label securities decreased 7 basis points to 0.45%.
The five states with the highest share of loans that were current as a percent of servicing portfolio were Washington, Colorado, Idaho, Oregon, and California. The five states with the lowest share of loans that were current as a percent of servicing portfolio were Louisiana, Mississippi, Indiana, New York, and West Virginia.
“The prevalence of forbearance plans has dramatically dropped since 2020, and the reasons that borrowers are in forbearance are changing,” said Marina Walsh, MBA’s vice president of industry analysis. “About two-thirds of borrowers are still in forbearance because of the effects of Covid-19, but a growing share of borrowers are in forbearance for other reasons that cause temporary hardship such as financial distress or natural disasters. With the Covid-19 national emergency lifted, Fannie Mae and Freddie Mac recently announced the retirement of certain Covid-19 flexibilities relating to forbearance plans and workouts.”
Walsh added that in view of “the recent natural disasters impacting California, Washington, and Hawaii, forbearance is one way for mortgage servicers to mitigate the potential impacts on homeowners.”
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