Forbearance requests reaches 3.5 million in mid-April
With unemployment claims rising to astronomical levels over the past month, the share of all mortgage borrowers asking to be put into forbearance plans grew to 3.5 million as of April 19.
The total number of loans currently in forbearance climbed to 6.99% of servicers' portfolio volume, up from 5.95% the week prior, according to a survey from the Mortgage Bankers Association. Before the onset of the coronavirus pandemic in earl March, only 0.25% of all loans were in forbearance.
"Forbearance requests fell relative to the prior week but remain roughly 100 times greater than the early March baseline," said Mike Fratantoni, senior vice president and chief economist at MBA. "While the pace of job losses has slowed from the astronomical heights of just a few weeks ago, millions of people continue to file for unemployment. We expect forbearance requests will pick up again as we approach May payment due dates."
Other key findings from MBA's survey included:
- By investor type, Ginnie Mae had the largest overall share of loans in forbearance, up from 8.26% to 9.73%. Ginnie Mae-backed mortgages also posted the largest week-over-week growth of 1.47%.
- The percentage of Fannie Mae and Freddie Mac loans in forbearance was also higher from the week before, up from 4.64% to 5.46%.
- The share of other loans, such as private label securities and portfolio loans, jumped from 6.43% to 7.52%.
- For independent mortgage bank servicers, loans in forbearance increased to 6.52%, while loans in forbearance for depository servicers grew to 7.87%.
- The number of calls received by servicer call centers per week increased from 8.8% to 10.0%.
- Hold times remained relatively flat at 5 minutes.
- Abandonment rates increased slightly from 9.7% to 9.9%.
- Average call length rose for the fifth consecutive week from 7.6 minutes to 7.7 minutes.
"The combination of stimulus payments, expanded unemployment insurance benefits, further fiscal and monetary actions, and states reopening will hopefully begin to stabilize forbearance requests and the overall economy," Fratantoni said.
