The pace of borrowers seeking delayed mortgage payments is slowing, according to data released Monday by the Mortgage Bankers Association.
The number of loans in forbearance increased 10 basis points for the week ending May 24, to 8.46% of outstanding home loans from 8.36% the prior week, the MBA said. That’s the smallest increase reported week-over-week since the week of March 9.
About 4.2 million mortgages are in forbearance, the report said.
“MBA’s survey continues to indicate that fewer homeowners are seeking forbearance as more states across the country reopen their economies and prospects begin to improve,” said Mike Fratantoni, MBA’s chief economist, in a statement. “Policy support for households, including expanded unemployment insurance benefits and other transfers, have helped many stay on their feet during this crisis.”
About one in every four workers, or about 40 million Americans, filed for unemployment benefits since the COVID-19 pandemic started, according to last week’s data from the Labor Department. The $2.2 trillion CARES Act, passed in late March, expanded jobless benefits by adding $600 a week to state payouts.
Broken out by investor type, Ginnie Mae mortgages – primarily backed by the Federal Housing Administration and the Veterans Administration – had the largest overall share of loans in forbearance.
“With 11.82% of Ginnie Mae loans currently in forbearance, FHA and VA borrowers are struggling the most,” Fratantoni said. That’s up from 11.6% the prior week.
The share of Fannie Mae and Freddie Mac loans in forbearance increased week-over-week by three basis points, to 6.39% from 6.36%.
For other mortgages held by lenders, such as private-label securities and portfolio loans, the forbearance share rose to 9.67% from 9.54% the previous week.
By comparison, the overall forbearance rate was 0.25% before the coronavirus shut down the U.S. economy, MBA has said.
Forbearance requests dropped across all investor types for the sixth consecutive week versus the prior week, to 0.2% from 0.28% of servicing portfolio volume, Monday’s report said.
Weekly call center volume has also declined to the lowest level since the forbearance survey series started the week of March 2, MBA said, to 6.6% from 8.6% of servicing portfolio volume. That’s led to further declines in wait times and abandonment rates, Fratantoni said.