Nearly 4.3 million homeowners were in forbearance plans during the first week of June, the Mortgage Bankers Association said Monday. But the forbearance growth rate was small, rising just two percentage points to 8.55% from 8.53% the prior week.
Americans who have struggled to pay their bills amid a wave of job losses from the coronavirus pandemic have sought forbearance options in recent months. The survey results showed a slight uptick in the overall share of loans in forbearance, but the increase was driven primarily by a larger share of portfolio and private-label securities loans in forbearance, according to Mike Fratantoni, senior vice president and chief economist at MBA.
“Although there continues to be layoffs, the job market does appear to be improving, and this is likely leading to many borrowers in forbearance deciding to opt out of their plan,” Fratantoni said in MBA’s latest Forbearance and Call Volume Survey, which covers the period from June 1 through June 7.
With June mortgage payments due, servicers reported the first increase in forbearance requests in two months, he added.
“The level of forbearance requests is still quite low, but there was a noticeable increase in call volume over the course of the week,” Fratantoni said.
Forbearance requests as a percent of servicing portfolio volume increased across all investor types for the first time since the week ended April 5. The increase in weekly servicer call center volume was likely driven by beginning-of-month payment inquiries, the report said.
Private-label loans led the increase, rising to 10.18% from 10.03%, the report said. The forbearance share for mortgages backed by Fannie Mae and Freddie Mac fell from 6.4% to 6.38%, while the percentage for loans backed by the Federal Housing Administration and the Veterans Administration remained flat at 11.83%.
Source: usatoday
