The overall number of loans now in forbearance fell by 2 basis points from 0.40% of servicers’ portfolio volume in the previous month to 0.38% as of February 28, 2025, according to the Mortgage Bankers Association‘s (MBA) Monthly Loan Monitoring Survey (LMS). MBA estimates that 190,000 homeowners are enrolled in forbearance schemes. Since March 2020, mortgage servicers have granted almost 8.6 million forbearances.
In February 2025, the percentage of Freddie Mac and Fannie Mae loans in forbearance dropped by 2 basis points to 0.15%. The forbearance share for portfolio loans and private-label securities (PLS) dropped 3 basis points to 0.37%, while the forbearance share for Ginnie Mae loans fell 4 basis points to 0.84%.
“Despite February’s monthly decline of loans in forbearance, the estimated number of forbearances and loan workouts increased compared to one year ago,” said Marina Walsh, CMB, MBA’s VP of Industry Analysis. “The year-over-year gain may be attributed to increasing escrow payments for taxes and insurance, inflationary pressures, natural disasters, aging servicing portfolios, and a softening in the labor market. At the same time, the performance of loan workouts and overall servicing portfolios weakened compared to one year ago.”
Key Findings of MBA’s Loan Monitoring Survey (Feb. 1- 28, 2025)
- Total loans in forbearance decreased by 2 basis points in February 2025 relative to January 2025: from 0.40% to 0.38%.
- By investor type, the share of Ginnie Mae loans in forbearance decreased relative to the prior month from 0.88% to 0.84%.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased relative to the prior month from 0.17% to 0.15%.
- The share of other loans (e.g., portfolio and PLS loans) in forbearance decreased relative to the prior month from 0.40% to 0.37%.
- Loans in forbearance as a share of servicing portfolio volume (#) as of February 28, 2025:
- Total: 0.38% (previous month: 0.40%; previous year: 0.22%)
- Independent Mortgage Banks (IMBs): 0.40% (previous month: 0.43%; previous year: 0.25%)
- Depositories: 0.38% (previous month: 0.38%; previous year: 0.23%)
American Borrowers Are Facing Forbearance… But Why?
According to the data, an estimated 73.0% of borrowers are in forbearance because of temporary hardships brought on by disability, divorce, death, or job loss. Natural disasters have also put another 24.2% of Americans in forbearance. Due to COVID-19, the remaining 2.8% of borrowers are still in forbearance.
Approximately 18.2% of all loans in forbearance are in a forbearance extension, while 63.0% of all loans are in the initial forbearance plan stage. Forbearance re-entries, including re-entries with extensions, make up the remaining 18.8%.
In February 2025, the percentage of servicing volume with loan workouts (finished in 2020 or later) was 6.49%, which was up from 6.04% a year earlier and somewhat lower than 6.53% the month before.
As a percentage of servicing portfolio volume (#), the total number of current (not delinquent or in foreclosure) loans serviced was 95.16% in February 2025, down 19 basis points from 95.35% the previous month (on a non-seasonally adjusted basis) and 57 basis points from 95.73% a year earlier.
The five states with the highest share of loans that were current as a percent of servicing portfolio:
- Washington
- Idaho
- Alaska
- Oregon
- Colorado
The top five states with the lowest share of loans that were current as a percent of servicing portfolio:
- Louisiana
- Mississippi
- Indiana
- West Virginia
- Alabama
Additionally, The percentage of all completed loan workouts from 2020 onward that were current (repayment plans, loan deferrals/partial claims, loan modifications) rose to 66.36% in February 2025, up 73 basis points from 65.63% the previous month and down 932 basis points from 75.68% a year earlier.
The next publication of the Monthly Loan Monitoring Survey will be released on Monday, April 21, 2025.
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