True Stories: Hybrid, eNote and RON Implementation

Join expert panelists that will discuss the status of federal legislation, trends in digital adoption and how best to prepare your organization for the next generation of lending processes.

Spruce’s Patrick Burns on innovation in title technology

In the season finale of Housing News season 5, Spruce CEO discusses heightened investor interest in title tech, innovation and fintech adoption.

Top CFPB official “hates” QM rules, jeopardizing safe harbor

A top CFPB official in charge of the rule-making process has heavily criticized the agency's own qualifying mortgage rule, jeopardizing safe harbor.

Fraud risk factors at closing increased almost 90% last quarter

A variety of risk factors could be contributing to the drastic increase in wire and title fraud risk factors in mortgage and real estate closings – for example, compliance issues and an increase in transaction data errors.

CoronavirusMortgage

Mortgages in forbearance jumped 1,396% in one month

Comparatively, 0.25% of all loans were in forbearance for the week ending March 2

With unemployment claims rising weekly, the number of homeowners asking for respite on their mortgage payments has, predictably, increased by a sizable amount.

The total number of mortgages in forbearance rose to 3.74% in the week of March 30 to April 5, up from only 0.25% of all loans that were in forbearance for the week ending March 2.

That means the number of loans in forbearance increased by 1,396% in one month.

The data comes courtesy of survey data released Monday by the Mortgage Bankers Association. The survey noted that 2.73% of loans were in forbearance in the previous week, marking the sharp rise in forbearance requests as the coronavirus impacted the country.

According to the report, mortgages securitized by Ginnie Mae, the government agency that issues mortgage bonds backed by Federal Housing Administration and Department of Veterans Affairs loans, had the largest overall share in forbearance at 5.89% and grew by 1.58% versus the prior week.

Click to enlarge. Image courtesy of MBA

Meanwhile, forbearance on loans backed by Fannie Mae and Freddie Mac increased to 2.44%, up from 1.69% the prior week.

“The nationwide shutdown of the economy to slow the spread of COVID-19 continues to create hardships for millions of households, and more are contacting their servicers for relief in accordance with the forbearance provisions under the CARES Act,” said Mike Fratantoni, MBA’s senior vice
president and chief economist, in a statement Monday.

“The share of loans in forbearance grew the first week of April, and forbearance requests and call center volume further increased,” Fratantoni added. “With mitigation efforts seemingly in place for at least several more weeks, job losses will continue and the number of borrowers asking for forbearance will likely to continue to rise at a rapid pace.”

Unemployment claims reached 6.61 million for the week ending April 4, according to last Thursday’s Department of Labor data. That brings the total number of jobless claims to about 16.8 million in recent weeks of the coronavirus pandemic.

To aid those who have financial hardship due to COVID-19, the CARES Act permits borrowers with federally backed mortgages to request and receive forbearance for up to 12 months.

Here are additional findings from MBA’s weekly survey, which represents 26.9 million loans or nearly 54% of the first-mortgage servicing market:

  • Loans backed by independent mortgage banks rose to 4.17% of the servicing portfolio volume, up from 3.45% the prior week
  • Banks saw a 3.63% forbearance share, up from 2.24% a week before

Most Popular Articles

Mortgage forbearance drops to 4.36%, exits pick up steam

The downward trend of borrowers in forbearance picked up speed in the last week of April, falling 11 basis points to 4.36% of servicers’ portfolio volume.

May 10, 2021 By

Latest Articles

Compass loses money, explores mortgage

Compass is exploring either building a mortgage arm, buying a mortgage company or following the lead of other resi brokerages and entering into a JV.

May 12, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please