The number of mortgages where borrowers are putting off payments has seen a stark increase, according to new data from a financial industry group.
For the week ending April 12, 5.95 percent of home loans in servicers’ portfolio volume were in forbearance, up from 3.74 percent the week before that, according to the Mortgage Bankers Association’s latest Forbearance and Call Volume Survey. The group’s survey represents almost 77 percent of the first-mortgage servicing market, or 38.3 million loans.
“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,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement.
While mortgage servicers still saw a high level of forbearance requests during the second week of April, Fratantoni said, calls from borrowers dropped to 8.8 percent of servicing portfolio volume from 14.4 percent. The number of requests for forbearance also dropped over the week, and the amount of time people waited to reach a servicer also dropped during the second week of the month — a change from the prior weeks-long trend.
But more requests for assistance are likely on the way.
“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,” Fratantoni said.
The number of loans that have entered forbearance has risen sharply as the Covid-19 pandemic continues to force closures of business, public spaces and schools. For instance, for the week of March 2, prior to the government-mandated shutdowns in the U.S., just 0.25 percent of loans were in forbearance, according to MBA.
Write to Mary Diduch at [email protected]