The share of US homeowners whose mortgages are in forbearance dropped for the fifth straight week, now sitting at 7.8 percent of all mortgages in the country, according to estimates released Monday by the Mortgage Bankers Association.
The MBA said that as of July 12 about 3.9 million homeowners were still in forbearance plans that allow them to pause their mortgage payments during the coronavirus pandemic. The percentage dropped from 8.18 percent the week before.
“The share of loans in forbearance dropped to its lowest level in over two months, driven by an increase in the pace of exits as more homeowners have been able to get back to work,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The decline in the forbearance share was broad based, with decreases for GSE, Ginnie Mae, and portfolio/PLS loans.”
The survey found:
- The share of Ginnie Mae loans in forbearance decreased from 10.56 percent to 10.26 percent.
- The share of Fannie Mae and Freddie Mac loans in forbearance decreased from 6.07 percent to 5.64 percent.
- Mortgages managed by independent mortgage banks fell from 8.1 percent to 7.83 percent.
- Mortgages managed by banks dropped from 8.8 percent to 8.23 percent.
“Almost half of borrowers remaining in forbearance are now in an extension of the original term, while the remainder are in their initial forbearance plan,” Fratantoni said. “The pace of new forbearance requests remains quite low compared to earlier in the crisis, but we are watching carefully for any increases due to either the pick-up in COVID-19 cases or the cessation of enhanced unemployment insurance benefits at the end of this month.”
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.