The number of Americans unable to pay their mortgages continues to grow along with soaring joblessness.
The Mortgage Bankers Association (MBA) said this week that the number of loans in forbearance in mortgage servicers' portfolios grew to 6.99%, up 16.7% from the already-devastating 5.99% the week before.
That means that about 3.5 million borrowers have been granted varying degrees of formal relief that will let them catch up with their payments later.
"Forbearance requests fell relative to the prior week but remain roughly 100 times greater than the early March baseline," MBA senior vice president and chief economist Mike Fratantoni said in this week's Forbearance and Call Volume Survey report.
And while the raw number of new unemployment claims fell this week from last, new claims were still in the millions this week. More than 30 million Americans have joined the rolls of the jobless in the past several weeks since the COVID-19 pandemic began, killing Americans by the tens of thousands while shutting down much of the U.S. economy.
GSEs add to relief efforts, FHA and VA lead in forbearances
The MBA survey found that by investor type, Ginnie Mae had the largest percentage of loans in forbearance at 9.73%. For government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, it was 5.46%. Forbearances were at 7.87% for depository servicers (the traditional banks and credit unions, for instance, that are holding loans in their own portfolios) and 6.52% for independent mortgage bank servicers.
"For FHA and VA borrowers, the share of loans in forbearance is even higher, at 10%," Fratantoni said in the report.
The Federal Housing Finance Agency (FHFA) has made a series of moves to help troubled borrowers and the troubled housing market, including barring foreclosures on loans the GSEs back, allowing the GSEs to buy some mortgages already in forbearance, and requiring servicers to cover only four months of nonpayment by borrowers.Then, this week, the FHFA clarified that under the CARES Act borrowers are not required to catch up with their payments in one lump sum after their forbearance ends.