Key Highlights
- According to CoreLogic, just under 6% of mortgages in some stage of delinquency at end of November 2020
- Mortgage Bankers Association (MBA) indicates 5.35% of mortgages in forbearance in latest weekly report
- 81% of mortgages in forbearance also in extensions of initial relief period
Mortgage Delinquencies Drop to Lowest Number Since Start of COVID Pandemic
CoreLogic’s latest mortgage delinquency count at the end November 2020 indicated that just less than 6% of all US mortgages, some 2.7M mortgages, were in some stage of delinquency. This is the lowest mortgage delinquency count since the beginning of the COVID pandemic.
The glitch in this good news is that seriously delinquent mortgages, mortgages that are more than 90 days past due, represent slightly under 4% of those mortgages compared to just over 1% of seriously delinquent mortgages one year ago, pre-pandemic.
Delinquency Declines are Positive
Frank Martell, president and CEO of CoreLogic, said, “The consistent decline in serious delinquency (over 90 days) since August is a sign of growing financial stability for families. In addition to ensuring that homeowners stay in their homes, the decline in delinquency means fewer distressed sales, which is both a positive for individual households and the overall housing market.”
Number of Loans in Forbearance Stuck in Low 5% Range
The Mortgage Bankers Association (MBA) indicated that some 5.35% of mortgages were in forbearance in its latest weekly report at the beginning of February. The problem here is that some 81% of those loans currently in forbearance are also in extensions of their initial three-month relief period.
(Designated as one-year relief programs, the government forbearance programs allow borrowers to delay their monthly mortgage payments in three-month increments.)
Mike Fratantoni, chief economist with the MBA, is concerned that the job market has not sufficiently improved to help the some 4M borrowers representing that 81% in forbearance extensions. Fratantoni said, “These are the…4M people who have been actively looking for work for 27 weeks or more (and)…likely to still be in forbearance and need additional support until the job market recovers to a greater extent.”
One-Year Forbearance Period Coming Up for Many Borrowers
Currently, there is an expectation but no definitive statement that the forbearance program will be extended beyond the one-year designated relief period. The expectation is that this relief program will be extended for federally backed loans by the Biden administration. We’ll let you know if/when that official word comes.
Thanks to CNBC.
