The total share of home loans in coronavirus-fueled forbearance increased from 3.74% to 5.95% for the week ending April 12, according to the new Forbearance and Call Volume Survey published by the Mortgage Bankers Association.
By investor type, Ginnie Mae-backed mortgages recorded the greatest increase in forbearance over the week, swelling from 5.89% to 8.26%. In comparison, the share of Fannie Mae and Freddie Mac loans in forbearance increased over the week from 2.44% to 4.64%.
In comparison, only 0.25% of all loans were in forbearance for the week of March 2.
In terms of servicing portfolio volume, independent mortgage bank servicers reached 5.69% as of April 12, compared to 4.17% one week earlier, an increase of 36%. Depository servicers ended the week with 6.57% of forbearance shares, up from 3.63% one week earlier, an increase of 80%.
In terms of call volume, the MBA survey found the percentage of servicing portfolio volume calls dropped from 14.4% to 8.8% while hold times decreased from 10.3 minutes to 4.9 minutes and abandonment rates declined from 17.0% to 9.7%. The average call length inched up slightly from 7.5 minutes to 7.6 minutes.
“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,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Mortgage servicers continue to receive a very high level of forbearance requests, but volumes were down somewhat compared to the prior week.”
Fratantoni added that with no immediate resolution to the pandemic and its economic havoc in sight, forbearance inquiries “will likely rise again as we approach May payment due dates.” He also put in a plug for the ongoing push to create a federal liquidity vehicle to aid servicers facing this new forbearance tidal wave.
“Mortgage servicers are performing an essential function of the housing finance system by continuing to advance funds to investors at a time when roughly 3 million homeowners are now in forbearance,” he said. To ensure market stability during these challenging times for consumers and the entire industry, servicers need access to interim financing so that they can continue to play this critical role.”
The survey covered almost 77% of the first-mortgage servicing market, accounting for 38.3 million loans.