The volume of the servicer's forbearance portfolio fell again – this time by seven basis points to 3.40% for the week ending August 1, according to a survey by Association of Mortgage Lenders.

According to the MBA estimate, 1.7 million homeowners are still on forbearance plans.

The proportion of Fannie Mae and Freddie Mac Deferred loans also declined, falling five basis points to 1.74%, and Ginnie Mae Loans were down 12 basis points to 4.18%. The share for portfolio loans and private label securities (PLS), which increased by six basis points in the past week, fell in the most recent study by seven basis points to 7.37%.

The mortgage deferral rate for independent mortgage lender (IMB) service providers decreased four basis points to 3.63% and the mortgage deferral rate for custodian service providers decreased 10 basis points to 3.49%.

This is the largest decrease in the percentage of deferred loans in three weeks, noted Mike Fratantoni, MBA senior vice president and chief economist.

How can service providers best assist borrowers in getting out of forbearance?

Service providers should communicate with borrowers early on and ensure that this is done compliantly by checking the current and proposed regulations, CFPB or otherwise. Make them aware that they have the option to sell their home now during the forbearance if they wish to do so as a deferral exit option.

Presented by: Altisource

"Of the 1.7 million homeowners remaining on forbearance, 13% are on 1." Forbearance has certainly provided both insurance and security to many of these homeowners worried about ongoing difficulties, and it is a positive sight that so many will still be able to make their payments with indulgence. "

Fratanoni added that default rates have increased slightly for borrowers who leave the forbearance and have started repayment plans, forbearance plans or changes over the course of the pandemic.

"However, the strong July labor market report provides evidence of a recovering economy that should provide further support to homeowners who abandon their indulgence in the coming months," he said.

That Housing and Urban Development Department (SKIN), Ministry of Agriculture (USDA) and Veterans Affairs Department (VA). it says in a press release from the White House.

For borrowers who can repay their mortgage, federal agencies will allow them to defer their payments until their mortgage ends. However, the White House said some homeowners would need "deeper assistance" to keep up to date and keep their homes.

The registration period for forbearance ends at the end of September.

After stages, 9.7% of the total deferred loan is in the initial planning phase, while 82.9% is in an extension phase. The remaining 7.4% are returnees.

Of the cumulative exits for the period from June 1, 2020 to August 1, 2021, 28.1% led to loan deferrals or partial claims. Another 22.9% represented borrowers who continued their monthly payments during their deferral period.

According to the MBA, 15.7% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan. Exactly 11% resulted in a loan change or a trial loan change.

For borrowers who are still unable to make monthly payments, HUD gives service providers the option to extend the mortgage term. Borrowers could extend their mortgage terms to 360 months at market rate to reduce their payments by 25%. In addition to an extension of the term, borrowers could receive an interest-free subordinate mortgage, also known as a partial claim, that is only due after the first mortgage has been repaid.

HUD offers a partial entitlement to borrowers who can make their mortgage payments again.

The USDA will also offer new options to help borrowers reduce their payments by 20%. The instruments include an interest rate cut, term extension and a mortgage prepayment advance to cover overdue mortgage payments and related costs. The options can be used individually or in combination.

There are also options for VA borrowers to reduce their monthly payments afterwards. The VA can buy up to 30% of the unpaid capital and arrears of the borrowers and provide an interest-free subordinated loan similar to a partial claim. Servicers can also extend the loan term up to 40 years.

source https://seapointrealtors.com/2021/08/10/forbearance-numbers-fall-delinquency-rates-rise/

 This free site is ad-supported. Learn more
​