New data from the Mortgage Bankers Association (MBA) indicates a further decline in the number of mortgages in active forbearance. The MBA monthly loan monitoring survey found the total number of loans in forbearance at the end of March declined by 5 basis points to 0.55 percent of servicer’s portfolio volume.

According to MBA’s estimate, mortgage servicers provided approximately 7.8 million borrowers with forbearance plans since March 2020. The number is now close to 275,000 homeowners that remain in forbearance plans.

In March 2023, the share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 basis points to 0.26 percent. Ginnie Mae loans in forbearance decreased 10 basis points to 1.18 percent, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 10 basis points to 0.68 percent.

“As the COVID-19 national emergency draws to a close, the number of loans in forbearance continues to drop,” Marina Walsh, MBA’s vice president of industry analysis, said. “Mortgage performance remains strong with the percentage of borrowers who were current on their mortgage payments and post-forbearance workouts increasing in March.”

Walsh suggested that a further downturn in the overall health of the economy may affect mortgage performance.

“MBA’s forecast still calls for a recession in 2023, which may change the current performance levels, but credit quality is generally good and many borrowers facing financial hardship can now access enhanced loss mitigation options that resulted from successes of pandemic-related policies,” Walsh added.