Number of mortgage loans in forbearance jumps, survey shows
Economic impact of the coronavirus is stretching household balance sheets
The number of people with mortgages seeking to have their payments paused or reduced jumped between March 30 and April 5 as the economic effects of the novel coronavirus outbreak stretch household balance sheets, a survey from the Mortgage Bankers Association showed on Monday.
The share of mortgage loans in forbearance rose to 3.74 percent from 2.73 percent during the reporting period, the industry lobbying group said. Ginnie Mae loans grew the most, to 5.89 percent from 4.31 percent. For Fannie Mae and Freddie Mac loans, 2.44 percent were in forbearance, up from 1.69 percent the prior week.
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That compared with only 0.25 percent of all loans in forbearance for the week of March 2. The number of requests for mortgage relief also rose.
More than 95 percent of Americans are under "stay-at-home" or "shelter-in-place" orders. The United States has the world's highest number of confirmed cases of COVID-19, the respiratory disease caused by the coronavirus.
The number of Americans seeking unemployment benefits in the last three weeks topped 15 million, Labor Department data released last week showed.
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"The nationwide shutdown of the economy ... 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.
About 54 percent of the first-mortgage servicing market responded to the survey. They cover about 26.9 million loans. More servicers are expected to respond in the coming weeks, MBA said.
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