In the final week before the beginning of May, and a new set of deadlines for borrowers to make mortgage payments, the Mortgage Bankers Association (MBA) found that the pace of new forbearance loans slowed for the second consecutive week.
In the MBA’s latest Forbearance and Call Volume Survey, the association found that an estimated 3.8 million borrowers are in forbearance, up from 3.5 million a week earlier.
The survey found that 7.54 percent of all loans are in forbearance as of April 26, up from 6.99 percent a week earlier, a total increase of about 300,000 loans. At the beginning of March, an estimated 12,500 loans nationwide were in forbearance.
“The share of loans in forbearance increased once again in the last full week of April, but the pace of new requests slowed,” MBA Chief Economist Mike Fratantoni said in a release. “With millions more Americans filing for unemployment over the week, the level of job market distress continues to worsen. That is why we expect that the share of loans in forbearance will continue to grow, particularly as new mortgage payments come due in May.”
Ginnie Mae-backed mortgages in forbearance rose to 10.45 percent of the overall portfolio, up from 9.73 percent a week earlier. Fannie Mae and Freddie Mac-backed mortgages in forbearance are at 5.85 percent, up from 5.46 percent a week earlier.
Banks have 8.41 percent of their portfolio in forbearance, up from 7.87 percent a week earlier, while independent mortgage bank servicers rose to 7.13 percent from 6.52 percent the previous week.
“As states across the country begin to re-open their economies, a silver lining we are seeing is indications of increased activity in the housing market, including more purchase applications in some markets,” Fratantoni said. “We are hopeful that the housing market can eventually contribute to a broader rebound in economic activity, which would then begin to reverse the unprecedented job losses experienced during this crisis.”
The survey included results totaling more than three-quarters of the first-mortgage servicing market, MBA said.