Key Highlights
- Nearly 4.3M mortgages in forbearance during last week of May
- That nearly 4.3M represents 8.53% of outstanding home loans, according to Mortgage Bankers Association (MBA)
The share of mortgages in forbearance rose to 8.53% of all mortgages, or close to 4.3M, in the last week of May. That share of 8.53% was up from the 8.46% share of mortgages, or 4.2M, just one week prior, reported the Mortgage Bankers Association (MBA).
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Private-label loans rose to a 10% share of mortgages in forbearance from 9.67% the week prior. The forbearance share for mortgages backed by Freddie Mac and Fannie Mae rose to 6.4% from 6.39% the week before as the forbearance share of loans backed by the Federal Housing Authority and the Veterans Administration climbed from 11.82% to 11.83%.
“While servicers reported only a 1-basis-point increase in the forbearance share for GSE and Ginnie Mae loans, the increase for private-label securities and portfolio loans rose to over 10%. Which is higher than the rate on GSE loans,” said Mike Fratantoni, chief economist with the MBA.
While the share of mortgages in forbearance continues to rise, forbearance requests for agreements to suspend mortgage payments are definitely slowing down as states are slowly reopening. Servicing portfolio volume decreased across all investor types for the eighth straight week, falling from 0.20% to 0.17%.
Fratantoni said, “With the job market beginning to gradually improve, more homeowners are exiting forbearance, and we are seeing declines in forbearance volume among some services.”
One good reason for real estate agents and brokers paying attention to these forbearance numbers and percentages is to get a handle on coming trends that may impact foreclosure filings in the short and mid-term. Government relief packages including mortgage forbearance can’t last forever.
Thanks to the Mortgage Bankers Association and HousingWire.
Also read: Podcast: Happening Now, Breaking News About Housing | Tim and Julie Harris, What Happens to Housing Market When Government Stimulus Ends?, Summer Home Buying Ready to Take Off
