Forbearance requests and re-entries increase as exits hits record low

“For the second straight month, the pace of forbearance exits reached another low since MBA began tracking exits in June 2020,” said Marina Walsh, vice president of industry analysis at MBA. “There was also a pick-up in new forbearance requests and re-entries for all loans, and particularly for Ginnie Mae loans. Even though the forbearance rate continued its downward trajectory, it was the smallest monthly decline since January 2021.”

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By investor type, the share of Ginnie Mae loans in forbearance decreased by three basis points to 1.60% month over month. The percentage of Fannie Mae and Freddie Mac loans in forbearance was down by four basis points to 0.64%, and forbearance share for portfolio loans and private-label securities (PLS) decreased 41 basis points to 3.02%.

The positive news, Walsh pointed out, is that the percentage of borrowers who were current on their mortgage payments rose slightly from 94.85% in December to 94.91% in January.

“However, there was some deterioration in the performance of borrowers with existing loan workouts. Borrowers in loan workouts may have experienced new life events unrelated to the pandemic, or alternatively, the Omicron variant may have triggered or re-triggered employment, health, or other stresses,” Walsh said.