By Jim Perskie
The number of loans in forbearance continues to rise, with nearly 6 percent of all mortgages in pause as borrowers cope with economic hardship caused by the coronavirus pandemic.
The share of loans in forbearance climbed from 3.74 percent to 5.95 percent as of April 12, according to the Mortgage Bankers Association’s Forbearance and Call Volume survey released Monday. That amounts to roughly 3 million mortgages.
Before the pandemic took hold of the economy, about 0.25 percent of mortgages were in forbearance.
“With over 22 million Americans filing for unemployment over the past month, homeowners are contacting their mortgage servicers seeking relief, leading to a sharp increase in the share of loans in forbearance across all loan types,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.
The survey found:
- Ginnie Mae loans grew the most relative to the prior week: from 5.89 percent to 8.26 percent.
- Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 2.44 percent to 4.64 percent.
- 6.57 percent of banks’ mortgages are in forbearance, up from 3.63 percent the week before.
- 5.69 percent of independent mortgage banks’ mortgages were in forbearance, up from 4.17 percent the week before.
Earlier this month, Federal Housing Finance Agency Director Mark Calabria predicted that just 1 percent of Fannie and Freddie mortgages would go into forbearance in April.
“Given that lockdowns and associated job losses will continue in the coming weeks, forbearance inquiries will likely rise again as we approach May payment due dates,” Fratantoni said. “Borrowers facing COVID-19-related hardships should contact their servicer to review all of their options.”