Mortgage Forbearance Alert: Whopping 4.2 Million Homeowners Are In Mortgage Forbearance Agreements
The numbers increased from 4.1 million mortgages last week.
The MBA says Ginnie Mae mortgages were most likely to be in forbearance. Ginnie Mae loan pools are primarily backed by the Federal Housing Administration and the Veterans Administration. Thus, Ginnie Mae had an 11.6% share of loans in forbearance. This is an increase of 11.3% from the prior week.
FHA borrowers tend to have lower credit scores and slimmer savings. As a result, they are being harder-hit by a spike in job losses.
The U.S. unemployment rate spiked to a record high of 14.7% in April due to the spread of the COVID-19.
The MBA also says Fannie Mae and Freddie Mac’s share of loans in forbearance rose to 6.4% from 6.3%.
Private Label MBS Have Largest Share Of Loans In Mortgage Forbearance
Mortgage forbearance with private-label mortgage-backed securities and portfolio loans rose to 9.5% from 9.3%.
The MBA report says the forbearance rate was .25% prior to COVID-19 shutting down the U.S. economy.
The report also says that the average time representatives talk to borrowers interested in a forbearance increased to 7 minutes from 6.7 minutes.
The average wait time for callers fell to 1.6 minutes from 2 minutes. The call abandonment rate or the callers who hung up before speaking to someone fell to 4.6% from 5.3%.
Forbearance requests as a percent of servicing portfolio volume dropped across all investor types for the sixth consecutive week relative to the prior week: to 0.28% from 0.32%.
MBA Chief Economist Mike Fratantoni told Housingwire:
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