A new survey by the Mortgage Bankers Association (MBA) found that the number of home loans in forbearance rose from 2.73% to 3.74% during the week of March 30 to April 5.
Mortgages backed by Ginnie Mae had the largest weekly growth of 1.58% and the highest overall share in forbearance requests (5.89%).
"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," said Mike Fratantoni, MBA's SVP and Chief Economist. "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 continue to rise at a rapid pace."
The MBA added that as of March 2, just 0.25% of all loans were in forbearance.
The share of loans in forbearance from Fannie Mae and Freddie Mac rose from the prior weeks’ 1.69% to 2.44%.
Requests for comment by the Department of Housing and Urban Development, Fannie Mae, and Freddie Mac were not returned by press.
Ginnie Mae was the loan organization who offered comments, saying that its enhanced Pass-Through Assistance Program is in place to help servicers impacted by deferred or reduced mortgage payments.
“We see that program as an extraordinary and last resort option for our Issuers in these unprecedented times to serve homeowners and renters in America who rely on government mortgage programs financed by Ginnie Mae,” Ginnie Mae said in a statement. “This program is intended to minimize disruptions in the mortgage servicing market as servicers work to provide relief to borrowers affected by the COVID-19 National Emergency.”
Analysis from Black Knight’s latest Mortgage Monitor Report found that if 5% of homeowners seek forbearance, servicers would need to advance more than $2.1 billion in principal and interest per month to security holders. If the number of homeowners seeking forbearance rises to 10%, the monthly cost could jump to $4.2 billion.
“The various forbearance programs being offered to borrowers via the recently passed CARES Act, as well as via individual agencies and mortgage servicers, are a key difference today,” Black Knight Data & Analytics President Ben Graboske said.
However, a growing number of lawmakers are looking to the federal government to step in to support mortgage servicers. Twenty Republican members of the House of Representatives sent a letter to Treasury Secretary Steven Mnuchin requesting assistance.
“The mortgage industry cannot shoulder the entire onus of government actions to protect American homeowners impacted by COVID-19 when it does not have access to needed liquidity to execute on those government actions,” the letter states.
The letter continued by saying, “the best way to protect the American taxpayer would be to create a facility now—in hope that it never needs to be used—than to wait for a market disruption when it may be too late. The mere creation of such a facility may provide a level of support to the market without its even being utilized.”