There was a pretty big drop in the percentage of US mortgages in forbearance this week, with 3.2 million homeowners still in plans to pause their loans, according to the weekly report released Monday by the Mortgage Bankers Association.
MBA’s survey found that 6.32 percent of mortgages were in forbearance as of October 4, down from 6.81 percent the week before.
“With the forbearance program for federally backed loans under the CARES Act reaching the six-month mark, many borrowers saw their forbearance plans expire because they did not contact their servicer. Another reason for expirations was that borrower information needed to determine an appropriate loss mitigation option was not yet in place,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Borrowers with federally backed mortgages need to contact their servicer to obtain another six months of reprieve if they are still impacted by the pandemic. As of now, some borrowers are exiting forbearance without making contact or without a plan in place. Servicers are making outreach efforts to attempt to work with these borrowers to determine the best options for them, including an extension.”
They survey found:
- The share of Ginnie Mae loans in forbearance decreased from 9.16 percent to 8.27 percent.
- The share of Fannie Mae and Freddie Mac loans in forbearance dropped from 4.39 percent to 4.03 percent.
- Independent mortgage bank-managed loans in forbearance dropped from 7.19 percent to 6.65 percent.
- Bank mortgages dropped from 7.03 percent to 6.53 percent.
“On a more positive note, nearly two-thirds of borrowers who exited forbearance remained current on their payments, repaid their forborne payments, or moved into a payment deferral plan. All of these borrowers have been able to resume – or continue – their pre-pandemic monthly payments,” Fratantoni said.