The share of mortgage loans in forbearance dipped slightly to 7.74 percent in the latest Mortgage Bankers Association forbearance survey released Monday. That works out to an estimated 3.9 million mortgages.
It was the sixth straight week that the number of mortgages in forbearance has decreased.
“The share of loans in forbearance declined by a smaller amount than in previous weeks, as the pace of borrowers exiting forbearance slowed,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Although the GSE portfolio of loans in forbearance should continue to improve, Ginnie Mae’s portfolio saw an uptick of both loans in forbearance and borrowers requesting forbearance. The high level of unemployment claims in recent weeks may be playing a role, as weakness would likely impact Ginnie Mae’s portfolio first.”
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.
At its peak, the share of all mortgages in forbearance sat at 8.55 percent in early June. Before the pandemic hit, just 0.25 percent of mortgages were in forbearance.
This week’s survey found that as of July 19:
- Total loans in forbearance decreased by 6 basis points from 7.80 percent to 7.74 percent.
- Ginnie Mae loans in forbearance increased: from 10.26 percent to 10.27 percent.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 5.64 percent to 5.49 percent.
- The share of independent mortgage bank loans in forbearance climbed to 7.85 percent from 7.83 percent.
- The share of bank-managed loans in forbearance dropped from 8.23 percent to 8.06 percent.
See the full report here.