As COVID-19 drags on, Americans are increasingly desperate for payment assistance
In the second weekly survey of its kind, Mortgage Bankers Association found that forbearance activity in the U.S. increased significantly between April 6 and April 12.
The survey collected data on 38.3 million loans serviced as of April 12, roughly 77 percent of the first mortgage servicing market. 54 servicers participated in the survey, including 21 depositories and 31 independent mortgage companies.
MBA found that, in one short week, the percentage of total loans in forbearance among respondents increased from 3.74% to 5.95%. For the IMB sample, the figure rose from 4.17% to 5.69%. The banks saw their percentage of loans in forbearance almost double, jumping from 3.63% to 6.57%.
The number of total loans in forbearance on March 2: 0.25%
“Mortgage servicers continue to receive a very high level of forbearance requests, but volumes were down somewhat compared to the prior week,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a comment accompanying the report. “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.”
The survey further breaks the numbers down by investor type, illustrating the challenges being faced by Ginnie Mae and Fannie/Freddie. Regarding IMB mortgages, Ginnie saw its percentage of loans in forbearance increase from 5.89% to 7.23%, while Fannie and Freddie’s rose from 2.61% to 3.9%. MBA’s “Other” category, after experiencing a 2.1% week-over-week increase, now sits at 8.27%
The weekly increases seen in the bank sample are far more alarming:
- Ginnie: 10.19% of loans in forbearance (was 6.78%)
- Fannie/Freddie: 5.42% in forbearance (was 2.25%)
- “Other” (PLS, Portfolio, etc.): 6.09% in forbearance (was 3.23%)
The survey also looked at weekly borrower forbearance requests, which have skyrocketed. At the beginning of March, MBA pegged the percentage of total forbearance requests at 0.01%. In the latest report, that number had risen to 1.79%.
