The share of mortgage loans in forbearance climbed slightly last week to 8.16 percent, a second straight week of relatively small increases in the number of borrowers who have paused their payments during the coronavirus pandemic.
The Mortgage Bankers Association said the percentage of mortgages in forbearance increased from 7.91 percent the week before and 7.54 percent a week earlier. All told, the MBA estimates that 4.1 million homeowners are now in forbearance plans for the week ending May 10.
“The pace of forbearance requests continued to slow in the second week of May, but the share of loans in forbearance increased,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “There has been a pronounced flattening in loans put into forbearance – despite April’s uniformly negative economic data, remarkably high unemployment, and it now being past May payment due dates.”
The $2 trillion CARES Act includes a moratorium on foreclosures and the right to forbearance on federally backed mortgages. Forbearance allows borrowers to put off payments for at least 180 days if they suffer economic hardship during the pandemic.
MBA’s survey found:
- The share of Ginnie Mae loans in forbearance increased from 10.96 percent to 11.26 percent.
- The share of Fannie Mae and Freddie Mac loans in forbearance increased from 6.08 percent to 6.25 percent.
- Bank loans in forbearance increased from 8.75 percent to 8.99 percent.
- Independent mortgage banks increased from 7.54 percent to 7.85 percent.
“We will continue to closely monitor the forbearance request and call volume data for any sign of an uptick, but current trends suggest that if the economy continues to gradually reopen, the situation could be stabilizing,” Fratantoni said.