Forbearance rate declined to just 1.18% in February In total, about 590,000 homeowners were in forbearance plans as of February 28
Forbearance rate declined to just 1.18% in February
In total, about 590,000 homeowners were in forbearance plans as of February 28

Servicers’ forbearance portfolio volume dropped in February for the 21st-consecutive month, with more borrowers current on their mortgage payments due to improvements in the economy and viable loss mitigation options.
The total number of loans in forbearance decreased by 12 basis points, from 1.30% in January to 1.18% in February, according to the Mortgage Bankers Association (MBA). In total, about 590,000 homeowners were in forbearance plans as of February 28.
The most notable decline was in the portfolio loans and private-label securities (PLS) category, dropping by 30 basis points to 2.72%. Ginnie Mae-insured loans in forbearance decreased 10 basis points to 1.50% of servicers’ portfolio volume. Meanwhile, Fannie Mae and Freddie Mac-backed loans dropped by eight basis points to 0.56%.
The survey included data on 36.4 million loans serviced as of February 28, 73% of the first-mortgage servicing market.
Marina Walsh, MBA’s vice president of industry analysis, said in a statement that “there were many positive results in overall mortgage performance” in February.
“We can credit several factors to the improved performance, including the availability of viable loss mitigation options, low unemployment that is now below 4%, strong wage growth, and rising home equity,” Walsh said.
Total forbearance requests decreased two basis points to 0.16% of servicing portfolio volume in February, while exits decreased five bps to 0.23% of the total. The survey also shows that 30.1% of total loans were in the initial stage last month, and 57% were in a forbearance extension. The remaining 12.9% were re-entries.
The survey also shows that loans serviced not delinquent or in foreclosure were 94.94% in February, up from 94.91% in January, and 350 basis points higher than one year ago.
During the last 20 months, MBA’s data revealed that 29.2% of exits resulted in a loan deferral or partial claim. Also, 19.1% represented borrowers continued to pay during the forbearance period. However, 17% were borrowers who did not make their monthly payments also did not have a loss mitigation plan.
According to Walsh, there was some improvement in the performance of borrowers with existing loan workouts, which are solutions for restructuring debt, such as repayments, deferrals, or partial claims.
Total loan workouts from 2020 that were current increased from 82.26% in January to 82.78% in February, as a share of the total workouts in servicing portfolio. Walsh said this was the first improvement since June 2021.

“The three results – the lower forbearance rates and higher performance rates for both total borrowers and borrowers in workouts – are especially favorable given that there is typically a dip in mortgage performance in February because of the shortened number of days to make a payment,” Walsh said. rates, and are less likely to move as rates move higher — this does not bode well for housing supply.”
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