The percentage of mortgages in forbearance in the United States barely increased last week, with the number bank-managed mortgages in forbearances actually decreasing for the first time since the COVID-19 pandemic took hold.
The latest Mortgage Bankers Association report released Monday found that 8.53 percent of U.S. mortgages were in forbearance as of May 31 – up from 8.46 percent a week earlier. By contrast, the percentage increased by 1 to 2 percentage points during some weeks in April.
That equates to about 4.3 million homeowners whose mortgages are in forbearance.
“With the job market beginning to gradually improve, more homeowners are exiting forbearance, and we are seeing declines in forbearance volume among some servicers,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “However, this week’s findings did reveal divergence among servicers. The share of loans in forbearance decreased for depository servicers but continued to increase for IMBs.”
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 11.82 percent to 11.83 percent.
- The share of Fannie Mae and Freddie Mac loans in forbearance increased from 6.39 percent to 6.4 percent.
- Bank loans in forbearance decreased from 9.19 percent to 9.18 percent.
- Independent mortgage banks increased from 8.21 percent to 8.39 percent.
In early March, just 0.25 percent of mortgages were in forbearance.