The number of mortgages in forbearance in the United States increased slightly in the latest report, but the rate of increase continues to level off as fewer homeowners are opting to push pause on their loan payments during the coronavirus pandemic.
The latest Mortgage Bankers Association report released Tuesday found that 8.36 percent of U.S. mortgages were in forbearance as of May 17 – up 0.20 points from 8.16 percent a week earlier. By contrast, the percentage increased by 1 to 2 percentage points during some weeks in April.
“Although job losses continue at extremely high rates, mortgage servicers are reporting only modest increases in the share of loans in forbearance as of May 17,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.
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 11.26 percent to 11.6 percent.
- The share of Fannie Mae and Freddie Mac loans in forbearance increased from 6.25 percent to 6.36 percent.
- Bank loans in forbearance increased from 8.99 percent to 9.13 percent.
- Independent mortgage banks increased from 7.85 percent to 8.11 percent.
“The decline in employment and income is hitting FHA and VA borrowers harder, leading to 11.6 percent of Ginnie Mae loans currently in forbearance,” Fratantoni said.