Mortgage bankers say that many homeowners are coming out of forbearance, with only 7.4%, so far, either selling the home, doing a refi or otherwise paying off the mortgage. 1 in 4 (23.2%) never stopped making monthly payments; another 1 in 4 (28%) ended up having their loans deferred.

The number of homes in forbearance this week (3.5%) dropped again from last week’s numbers (3.76%), according to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey. According to MBA’s estimate, 1.75 million homeowners are in forbearance plans.

Percentage in forbearance by type of loan

• Fannie Mae and Freddie Mac loans (conventional): Down 8 basis points to 1.83%.

• Ginnie Mae (FHA, VA, etc.): Down 42 basis points to 4.36%

• Portfolio loans and private-label securities (PLS): Down 61 basis points to 7.33%

• Independent mortgage bank (IMB) servicers: Down 19 basis points to 3.68%

• Depository servicers: Down 36 basis points to 3.62%

“Forbearance exits edged up again last week, and new forbearance requests dropped to their lowest level since last March, leading to the largest weekly drop in the forbearance share since last October and the 20th consecutive week of declines,” says Mike Fratantoni, MBA’s senior vice president and chief economist.

“The forbearance share decreased for every investor and servicer category,” he said, crediting recent economic data that supports “further improvements in the forbearance numbers as more homeowners are able to resume their payments.”

Where happened when homeowners came out of forbearance?

According to MBA, of all forbearance exits between June 1, 2020, and July 11, 2021:

• 28.0% resulted in a loan deferral/partial claim

• 23.2% were borrowers who kept making monthly payments in forbearance, perhaps seeing the forbearance option as a “just in case” tool

• 15.7% didn’t make all of their monthly payments while in forbearance, yet exited the program without a loss-mitigation plan in place

• 13.5% resulted in reinstatements – paying back past-due amounts and picking up where they left off

• 10.7% resulted in a loan modification or trial loan modification.

• 7.4% paid off the full loan, either by refinancing or selling the home

• 1.5% resulted in repayment plans, short sales, deed-in-lieus or other reasons

Source: Florida Realtors®