WASHINGTON–Millions of homeowners have taken advantage of new government rules enabling them to reduce or delay their mortgage payments, according to new data from the Mortgage Bankers Association.
In the week ending April 12, the share of loans in forbearance jumped to 5.95%. That's a 60% increase from the prior week, according to an MBA survey of more than three quarters of home loans, or about 38.3 million loans. At the beginning of March, before the coronavirus pandemic caused widespread shutdowns across the country, only 0.25% of all loans were in forbearance, the MBA said.
In the MBA data mortgages backed by Ginnie Mae showed the largest growth (2.37%) from the prior week and the largest overall share in forbearance by investor type (8.26%). Depository servicers - at 6.57% - surpassed independent mortgage bank (IMB) servicers (5.69%) for the highest share of loans in forbearance.
‘Sharp Increase’
"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 SVP/chief economist in a statement. "Mortgage servicers continue to receive a very high level of forbearance requests, but volumes were down somewhat compared to the prior week. Given that lockdowns and associated job losses will continue in the coming weeks, forbearance inquiries will likely rise again as we approach May payment due dates. Borrowers facing COVID-19-related hardships should contact their servicer to review all of their options.
"Mortgage servicers are performing an essential function of the housing finance system by continuing to advance funds to investors at a time when roughly three-million homeowners are now in forbearance,” Fratantoni continued. “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."
Other Findings
Among the key findings in MBA's Forbearance and Call Volume Survey for April 6-12, 2020
- Total loans in forbearance grew relative to the prior week from 3.74% to 5.95%. In comparison, only 0.25% of all loans were in forbearance for the week of March 2.
- By investor type, Ginnie Mae loans grew the most relative to the prior week: from 5.89% to 8.26%.
- The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 2.44% to 4.64%.
- Forbearance requests as a percent of servicing portfolio volume (#) dropped relative to the prior week: from 2.43% to 1.79%
Findings Related to Weekly Servicer Call Center Volume
- As a percent of servicing portfolio volume (#), calls dropped from 14.4% to 8.8%.
- Hold times decreased from 10.3 minutes to 4.9 minutes.
- Abandonment rates declined from 17.0% to 9.7%.
- Average call length rose from 7.5 minutes to 7.6 minutes.
- Loans in forbearance as a share of servicing portfolio volume (#) as of April 12, 2020:
- Total: 5.95% (previous week: 3.74%)
- IMBs: 5.69% (previous week: 4.17%)
- Banks: 6.57% (previous week: 3.63%)