By Jim Perskie
The number of mortgage loans in forbearance decreased slightly in the latest Mortgage Bankers Association weekly report – though there are other indications that the number may begin to climb again.
The MBA report released Monday found that 8.47 percent of mortgages in the United States were in forbearance as of June 21, down from 8.48 percent the week before. That works out to about 4.2 million homeowners in forbearance – the third weekly drop in a row.
“The overall share of loans in forbearance declined for the second week in a row, led by the third straight drop in GSE loans,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Many borrowers initially received a three-month forbearance term, and as of June 21, 17 percent of loans in forbearance have now been extended, with the largest share of those being Ginnie Mae loans.”
The 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.
Black Knight estimated last week that 8.8 percent of homeowners (or 4.7 million) were in forbearance as of June 23 – the first increase the firm had seen after three weeks of declines.
The MBA survey found:
- Ginnie Mae loans in forbearance remained flat at 11.83 percent.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 6.31 percent to 6.26 percent.
- The share of independent mortgage bank loans in forbearance climbed to 8.42 percent from 8.40 percent.
- The share of bank mortgages in forbearance dropped from 9.15 percent to 9.09 percent.
“The level of forbearance requests remains quite low as of mid-June,” Fratantoni said. “The rebound in the housing market is likely one of the factors that is providing confidence to both potential homebuyers and existing homeowners during these troubled times.”