Nearly 6 percent of all mortgages in America are now in forbearance, according to new data from the Mortgage Bankers Association.
The MBA’s latest survey for the week ending April 12 showed the total number of loans now in forberance jumped from 3.47 percent to 5.96 percent. However, the association’s Forbearance and Call Volume Survey also showed that forbearance requests as a percent of servicing portfolio volume dropped relative to the prior week: from 2.43 percent to 1.79 percent, suggesting that the immediate surge in these requests is slowing for the moment.
The share of mortgages backed by Ginnie Mae now in forbearance showed the largest growth in from the prior week, at 2.37 percent, and the largest overall share in forbearance by investor type at 8.26%. Depository servicers – at 6.57 percent – surpassed independent mortgage bank servicers – at 5.69 percent – for the highest share of loans in forbearance. The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week from 2.44 percent to 4.64 percent.
“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,” MBA Senior Vice President and Chief Economist Mike Fratantoni said in a statement. “Mortgage servicers continue to receive a very high level of forbearance requests, but volumes were down somewhat compared to the prior week. 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.”
With the share of loans in forbearance rising, servicers’ finances are coming under increasing pressure, leading to calls for the federal government to provide them a liquidity facility during the crisis.