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42 | M R EP O RT SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T The number of homeowners in forbearance plans fell further in December, as the MBA estimates that just 705,000 U.S. homeowners are currently in some stage of forbearance. I n its latest Loan Monitoring Survey, the Mortgage Bankers Association (MBA) reports that the total number of loans now in forbearance decreased by 26 basis points from 1.67% of servicers' portfolio volume in the prior month to 1.41% as of Decem- ber 31, 2021. The MBA estimates that 705,000 U.S. homeowners are currently in forbearance plans. By investor type, the share of Ginnie Mae loans in forbear- ance decreased relative to the prior month, dropping 47 basis points from 2.10% to 1.63%. The share of GSE loans (Fannie Mae and Freddie Mac) in forbearance decreased relative to the prior month as well, dipping slightly from 0.76% to 0.68%. The share of portfolio and PLS loans in for- bearance decreased relative to the prior month, from 3.94% to 3.43%. "The share of loans in forbear- ance continued to decline in December 2021. This was espe- cially the case for government and private-label and portfolio loans, as those loans have higher levels of forbearance than loans backed by Fannie Mae and Freddie Mac," said Marina Walsh, CMB, MBA's VP of Industry Analysis. By stage, 23.2% of total loans in forbearance were in the initial forbearance plan stage, while 63.1% were in a forbearance exten- sion. The remaining 13.7% were forbearance re-entries, including re-entries with extensions. "It is likely that the remaining borrowers in forbearance have experienced either a permanent hardship that may require more complex loan workout solutions, or they have encountered a recent hardship for which they are now seeking relief," Walsh said. Of the cumulative forbearance exits for the period from June 1, 2020, through December 31, 2021, at the time of forbearance exit: • 29.1% resulted in a loan deferral/ partial claim • 19.5% represented borrowers who continued to make their monthly payments during their forbearance period • 16.9% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss miti- gation plan in place yet • 14.6% resulted in a loan modifi- cation or trial loan modification • 11.7% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance • 6.9% resulted in loans paid off through either a refinance or by selling the home • The remaining 1.3% resulted in repayment plans, short sales, deed-in-lieus, or other reasons "With the number of borrow- ers in forbearance continuing to decrease below 750,000, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020," Walsh said. And those forbearance exits may increase over the near term, as the employment situation nationwide continues to improve. According to the U.S. Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 199,000 in December, as the unemployment rate dropped to 3.9%. In February 2020, prior to the pandemic, the unemployment rate was at 3.5%, and unemployed persons numbered 5.7 million nationwide. The MBA also reported that the five states with the highest share of loans that were current as a percent of servicing portfolio included: Idaho, Washington, Colorado, Utah, and Oregon. The five states with the lowest share of loans that were current as a percent of servicing portfolio included: Louisiana, Mississippi, New York, Illinois, and Indiana. Forbearance Exits Continue to Rise