Mortgage Loans In Forbearance Are Down To Just 3%

Oct 7, 2021

In a sign of further strengthening and recovery in the US housing and finance markets, the percentage of mortgages in forbearance dropped again to just 3%. 

The new data from the Mortgage Bankers Association (MBA) further officially backs up what mortgage debt investors and servicers have already been saying over the past year. That the real estate and mortgage market is in much better shape than some media outlets and fake news on Facebook has reported to promote certain agendas. 

That does not mean that there isn't any distress out there. There always will be some level of distress. Even in the strongest bull markets. Yet, it is far, far less than during the hangover from 2008. Perhaps less than average. 

Mortgage Loan Forbearance Data

As of mid September 2021, just 3% of mortgage loans were in forbearance programs.

It is also important to note that there was much controversy about big banks like Wells Fargo throwing many borrowers into forbearance programs by default, without the borrower’s permission. So, the real share of those in forbearance out of need may be far, far smaller. 

Furthermore, after passing on stimulus and creditor help during the first year of COVID related lockdowns, many individuals and families may have only reached out to accept assistance to keep up with the dramatic inflation being caused by the immense amount of stimulus being injected into the market, and for those choosing to stay out of the job market. 

Data from the MBA also shows that almost 22% of those in forbearance continued to make their mortgage payments during that period. Others weren’t allowed to by their lenders and servicers.

Only around 11% of those in forbearance are new entries. The others are in extensions or have re-entered programs. 

The vast majority of those existing forbearance plans have done so through refinancing and paying off the balance, reinstating loans by paying past due amounts, or through loan modifications. 

Just 16% exited forbearance with no plan in place. 


The number of US mortgage loans in forbearance plans has continued to decline. This is a signal that the market is healthy, and should continue to attract much more capital. There is probably no more need for stimulus, unless outcomes of other recent policies and rule changes end up backfiring and causing more stress. 

There is a percentage of these mortgages which will become REOs, or will be sold off as non-performing loan notes. Though there are other types of notes which are attractive and may provide more volume to investors through the end of the year. 

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund