Mortgage Apps: Strong Trends

Bottom Line: Mortgage purchase activity increased last week after adjusting for the holiday-shortened day-count. While many businesses slowed for the Thanksgiving week, mortgage activity remained robust. The trend in mortgage application data continues to confirm the strength we have seen in US housing data over the last six months. While one could argue there has been a slight deceleration, activity remains robust, even during this seasonally slower part of the year. Overall, housing activity remains a major driver of the recovery, and mortgage application data suggest that should continue at least through the end of the quarter and likely even longer. The only hint of concern that we'll keep an eye on -- forbearances ticked up slightly after several months of decline. The MBA Mortgage Applications Index FELL by 0.6% during the week ended November 27 to 858.2, modestly above its 13 week average of 811.0 and 67.5% ABOVE its year-ago level. The Purchase Index ROSE by 9.0% to 342.9, moderately above its 13 week average of 313.4 and 27.3% ABOVE its year-ago level. The Refinance Index FELL by 4.6% to 3,891. With this decline, refinancing activity is modestly above its 13 week average of 3,692 and 102.1% ABOVE its year-ago level. Contract Mortgage Rates were MIXED with the 30-year fixed rate unchanged at 2.92% and the 15-year fixed rate increasing by 2 bps to 2.53%. Key findings of MBA's Forbearance and Call Volume Survey - November 16 to November 22, 2020

• Total loans in forbearance increased 6 basis points relative to the prior week: from 5.48% to 5.54%.
• By investor type, the share of Ginnie Mae loans in forbearance increased relative to the prior week: from 7.73% to 7.83%.
• The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 3.35% to 3.36%.
• The share of other loans (e.g., portfolio and PLS loans) in forbearance increased relative to the prior week: from 8.48% to 8.63%.
• By stage, 20.34% of total loans in forbearance are in the initial forbearance plan stage, while 77.42% are in a forbearance extension. The remaining 2.24% are forbearance re-entries.
• Total weekly forbearance requests as a percent of servicing portfolio volume (#) increased relative to the prior week: from 0.09% to 0.11%.
• Of the cumulative forbearance exits for the period from June 1 through November 22, 2020:
• 30.3% represented borrowers who continued to make their monthly payments during their forbearance period.
• 24.3% resulted in a loan deferral/partial claim.
• 16.6% resulted in reinstatements, in which past-due amounts are paid back when exiting forbearance.
• 12.8% represented borrowers who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
• 7.2% resulted in loans paid off through either a refinance or by selling the home.
• 6.8% resulted in a loan modification.
• The remaining 2.0% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
• Weekly servicer call center volume:
• As a percent of servicing portfolio volume (#), calls decreased from the previous week from 8.3% to 7.7%.
• Average speed to answer decreased from 2.3 minutes to 2.1 minutes.
• Abandonment rates increased from 5.4% to 5.5%.
• Average call length increased from 7.8 minutes to 8.0 minutes.
• Loans in forbearance as a share of servicing portfolio volume (#) as of November 22, 2020:
• Total: 5.54% (previous week: 5.48%)
• IMBs: 6.03% (previous week: 5.94%)
• Depositories: 5.47% (previous week: 5.44%)