The share of home loans in forbearance declined by 4 basis points from March to April, reaching a level of 0.51% of servicers’ portfolio volume, according to new data from the Mortgage Bankers Association (MBA).
The share of Fannie Mae and Freddie Mac loans in forbearance in April decreased by 2 basis points to 0.24% while Ginnie Mae loans in forbearance decreased by 7 basis points to 1.11%. The forbearance share for portfolio loans and private-label securities was down by 7 basis points to 0.61%.
The trade group’s latest Loan Monitoring Survey estimated 255,000 homeowners are currently in forbearance plans. The states with the highest share of loans that were current as a percent of servicing portfolio were Washington, Colorado, Idaho, Oregon and California, while those with the lowest share were Louisiana, Mississippi, New York, Indiana and Alabama.
Mortgage servicers have provided forbearance to 7.8 million borrowers since April 2020.
“While the number of loans in forbearance continues to dwindle, there was some deterioration in the performance of post-forbearance workouts,” said Marina Walsh, MBA vice president of industry analysis. “Three out of four borrowers are remaining current on their post-forbearance workouts, but this is down from the average of four out of five borrowers that was relatively consistent in 2022 and into 2023.”
Walsh added the situation may become more complicated in the coming months because MBA was forecasting “an economic slowdown and an increase in unemployment later this year and into 2024, which will impact loan performance.”