More than 8% of mortgages are now in COVID-19-related forbearance plans, according to the Mortgage Bankers Association.
The MBA’s latest Forbearance and Call Volume Survey shows that the total number of loans in forbearance as of May 10 had risen to 8.16% of all loans. That’s up from 7.91% the previous week.
About 4.1 million homeowners are now in forbearance plans, according to the MBA’s data.
Mortgages backed by Ginnie Mae again had the largest overall share of loans in forbearance by investor type at 11.26%.
The number of loans in forbearance for depository servicers rose to 8.99%, while the number of loans in forbearance for independent mortgage bank (IMB) servicers increased to 7.85%.
“The pace of forbearance requests continued to slow in the second week of May, but the share of loans in forbearance increased,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “There has been a pronounced flattening in loans put into forbearance – despite April’s uniformly negative economic data, remarkably high unemployment, and it now being past May payment due dates.
“However, FHA and VA borrowers are more likely to be employed in the sectors hardest hit in this crisis, which is why more than 11 percent of Ginnie Mae loans are currently in forbearance,” he adds.
Last week, applications for purchases increased for a fourth straight week and refinance activity remained strong, due to low rates.
“We will continue to closely monitor the forbearance request and call volume data for any sign of an uptick, but current trends suggest that if the economy continues to gradually reopen, the situation could be stabilizing,” Fratantoni says.