So Far, Less Than 4% of U.S. Home Loans Are in Forbearance

So Far, Less Than 4% of U.S. Home Loans Are in Forbearance

So far the number of U.S. homeowners seeking payment forbearance because of the pandemic remains small. But the share of Americans seeking relief from their mortgage payments is likely to grow the longer the economy is shut down due to the COVID-19 pandemic.

Only 3.74% of home loans across the country were in forbearance as of April 5, according to a just-released report from the Mortgage Bankers Association. 

The Washington, D.C.-based trade association survey represented 54% of the U.S. home mortgage servicing market of 26.9 million loans.

“The nationwide shutdown of the economy to slow the spread of COVID-19 continues to create hardships for millions of households, and more are contacting their servicers for relief in accordance with the forbearance provisions under the CARES Act,” Mike Fratantoni, the mortgage association’s senior vice president and chief economist, said in the new report. “The share of loans in forbearance grew the first week of April, and forbearance requests and call center volume further increased. “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 to continue to rise at a rapid pace.”

Because of the pandemic, the Federal Housing Finance Agency has authorized mortgage companies under its umbrella to offer homeowners mortgage forbearance of six months or more because of the job and income losses created by the current pandemic.

Borrowers have complained of long wait times with their mortgage companies and other complications in getting the payment relief.

“There was a decline in call center hold times and abandonment rates in the latest survey, which indicates the mortgage industry is adapting to the current environment by adding or reallocating staff and increasingly utilizing its websites to help borrowers,” Fratantoni said...

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