Forbearance rates continue to have slowed or retreated, according to a pair of new reports, but the latest information show increases in forbearances among private label and portfolio loans.
The Mortgage Bankers Association’s (MBA) latest survey revealed that the total number of loans now in forbearance increased to 8.53 percent as of May 31, up from 8.46 percent a week earlier. Black Knight Inc. reported that as of June 2, it found 4.73 million borrowers in forbearance, down from 4.76 million a week earlier.
After weeks of heavier increases in forbearances in mortgages backed by Ginnie Mae, MBA’s survey found the portfolio flat, rising just 1 basis point from the previous week to 11.83 percent of its portfolio.
However, non-government loans – private-label securities and portfolio loans – rose to 10.03 percent from 9.67 percent a week earlier. For comparison, loans backed by Fannie Mae and Freddie Mac rose by 1 basis point to 6.4 percent.
“While servicers reported only a 1-basis-point increase in the forbearance share for GSE and Ginnie Mae loans, the increase for private-label securities and portfolio loans rose to over 10 percent, which is higher than the rate on GSE loans,” MBA Chief Economist Mike Fratantoni said in a press release. “With the job market beginning to gradually improve, more homeowners are exiting forbearance, and we are seeing declines in forbearance volume among some servicers.”
The data was backed up by Black Knight, which found that government-backed mortgages in forbearance fell by 43,000 in the previous week, but portfolio and private-label forbearances rose by 9,000 in the same week.
It was not the only news that Black Knight called out in its report. CEO Anthony Jabbour found “concerning” signs in other areas.
“After rising sharply in April and then leveling off toward the end of May, the number of American homeowners in forbearance plans has now decreased for the first time since the crisis began. While this decline is welcome news, there are still concerning signs in the data,” he said. “According to Black Knight’s McDash Flash Payment Tracker, far fewer homeowners in forbearance remitted May payments than did in April. If that trend holds true through the end of the month, the market should be prepared for another likely rise in the delinquency rate for May. Also, expanded unemployment benefits are scheduled to end on July 31. It remains to be seen how that will impact both forbearance requests and overall mortgage delinquencies.”