Before the novel coronavirus pandemic, the word "forbearance" was a perhaps somewhat obscure term for a rarely used type of relief for financially troubled homeowners, especially in an economy that had been going strong for years.
Now, not so much. The Mortgage Bankers Association (MBA), in its weekly Forbearance and Call Volume Survey released Monday, May 18, says an estimated 4.1 million homeowners are now enrolled in such plans.
That's an estimated 8.16% of total servicers' volume in such deferred payment programs, up 3,164% from the 0.25% of mortgage volume in forbearance in early March.
Refinancing and application rise feed optimism
Last week's number was 7.91%, the MBA said, and the pace of requests is rising more slowly than when the pandemic first took hold of the U.S. economy, sending joblessness soaring and millions of household incomes plummeting.
That might be because so many loans are already in delayed payment plans, and because so many homeowners have also taken advantage of low interest rates to refinance their mortgages and save money on monthly payments.
MBA chief economist Mike Fratantoni also expressed this optimistic note: "Furthermore, the consecutive increase in purchase applications in the last four weeks is a sign that housing demand is strengthening as more states ease restrictions on activity and people get back to work."