The number of Americans granted pauses on their mortgage payments in the face of the pandemic is surging, according to the Mortgage Bankers Association (MBA). And it may be just the beginning.
The total number of mortgages in forbearance jumped from 2.73% to 3.74% -- or 37% -- from the week ending March 29 to the week ending April 5, the MBA said in its Forbearance and Call Volume Survey released Monday, April 13.
The survey is based on reports covering 26.9 million loans, or nearly 54% of the servicing market for first mortgages, the MBA said.
Only 0.25% of mortgages were in forbearance the week of March 2, the MBA said, meaning the number of mortgages with delayed payments granted spiked about 1,400% in a single month.
Just the beginning?
"With mitigation efforts seemingly in place for at least several more weeks, job losses will continue and the number of borrowers asking for forbearance will likely continue to rise at a rapid pace," said Mike Fratantoni, the trade group's senior vice president and chief economist.
The forbearance requests are pouring in from homeowners affected by the cratering of the U.S. job market, which has resulted in sudden unemployment for millions and unprecedented spikes in jobless claims.
By investor type, the MBA said, Ginnie Mae loans showed the highest percentage of loans in forbearance at 5.89%. Fannie Mae and Freddie Mac had 2.44% in forbearance as of April 5, the trade group said.
Those two government-sponsored enterprises were among loan guarantors who announced new forbearance guidelines while suspending evictions and foreclosures after the passage of the CARES Act, the $2.2 trillion national bailout signed into law on March 27.