Mortgage Forbearance Rates Dip to 0.47% This December: A Subtle Shift in the Housing Market

WASHINGTON, D.C. (January 21, 2025) – The Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey indicated that the overall number of loans currently in forbearance fell by 3 basis points, from 0.50% of servicers’ portfolio volume in the previous month to 0.47% as of December 31, 2024. According to the MBA’s projection, 235,000 homeowners are engaged in forbearance plans. Since March 2020, mortgage servicers have granted forbearance to nearly 8.5 million borrowers.

The proportion of Fannie Mae and Freddie Mac loans in forbearance diminished by 2 basis points to 0.19% in December 2024. Ginnie Mae loans in forbearance reduced by 4 basis points to 1.07%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased by 2 basis points to 0.40%.

“The overall mortgage forbearance rate saw a slight drop in December as some borrowers resumed their payments following last fall’s extreme weather in the Southeast,” stated Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “Despite this minor decrease, the current level of forbearance is greater than it was six months ago across all loan categories, and the performance of servicing portfolios and loan workouts has weakened.”

• The total loans in forbearance declined by 3 basis points in December 2024 compared to November 2024: from 0.50% to 0.47%.

• By investor type, the portion of Ginnie Mae loans in forbearance decreased from 1.11% to 1.07% compared to the prior month.

• The share of Fannie Mae and Freddie Mac loans in forbearance fell from 0.21% to 0.19% compared to the previous month.

• The percentage of other loans (e.g., portfolio and PLS loans) in forbearance diminished from 0.42% to 0.40% compared to the previous month.

• Loans in forbearance as a proportion of servicing portfolio volume (#) as of December 31, 2024:

• Total: 0.47% (previous month: 0.50%)

• Independent Mortgage Banks (IMBs): 0.54% (previous month: 0.58%)

• Depository banks: 0.38% (previous month: 0.39%)

• By reason, 54.5% of borrowers are in forbearance due to situations like temporary hardships stemming from job loss, death, divorce, or disability. Additionally, 42.8% are in forbearance because of a natural disaster. Fewer than 2.7% of borrowers remain in forbearance related to COVID-19.

• In terms of stages, 70.5% of total loans in forbearance are in the initial forbearance plan phase, while 16.8% are in an extension of forbearance. The remaining 12.7% are re-entries into forbearance, including those with extensions.

• The percentage of active loans serviced that were current (not delinquent or in foreclosure) as a proportion of servicing portfolio volume (#) stood at 95.05% in December 2024, down 17 basis points from the previous month’s 95.22% (on a non-seasonally adjusted basis) and down 39 basis points from a year ago.

• The five states with the highest proportion of loans that were current as a percent of servicing portfolio: Washington, Idaho, Alaska, Oregon, and Colorado.

• The five states with the lowest proportion of loans that were current as a percent of servicing portfolio: Alabama, West Virginia, Indiana, Mississippi, and Louisiana.

• The total completed loan workouts since 2020 (repayment plans, loan deferrals/partial claims, loan modifications) that were current as a proportion of total completed workouts decreased to 65.39% in December 2024, down 88 basis points from 66.27% in the previous month and down 900 basis points from a year prior.

NOTES:

• The MBA’s disaster recovery resource guide features vital information for impacted homeowners, including immediate actions following a disaster, starting with contacting their mortgage servicer, homeowners insurance provider, and applying for disaster assistance from the Federal Emergency Management Agency.
• For more detailed insights on performance metrics, including seasonally adjusted delinquency rates by stage (30 days, 60 days, 90+ days), please refer to the MBA’s Quarterly National Delinquency Survey at www.mba.org/nds. Results for the fourth quarter of 2024 are set to be published on Thursday, February 6, 2025.
• The next release of the Monthly Loan Monitoring Survey (LMS) is scheduled for Tuesday, February 18, 2025.