CARES allows borrowers whose loans are guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae to miss up to one year of monthly payments, which they must then repay at a later date or in a payment plan as they go time.
Forbearance requests jumped 78% for the week ending April 5e compared to the previous week, according to the Mortgage Bankers Association. The number of borrowers now in forbearance has exceeded 2 million; the share of total loans in forbearance service portfolios increased from 2.73% to 3.74% of total bank and non-bank service portfolios.
Ginnie Mae-guaranteed mortgages posted the strongest weekly growth and had the largest share of defaulters, at 5.89% of total service portfolios. Ginnie Mae supports loans from the FHA and the VA, which offer low to zero down payment options and are available to borrowers with generally lower credit scores.
“The shutdown of the national economy to slow the spread of COVID-19 continues to create difficulties for millions of households, and more and more people are contacting their agents for help under forbearance provisions CARES law, ”said Mike Fratantoni, chief of the MBA. economist. “With mitigation efforts apparently in place for at least several more weeks, job losses will continue and the number of borrowers applying for forbearance will likely continue to increase at a rapid rate. “
For loans guaranteed by Fannie Mae and Freddie Mac, which represent just over half of the overall mortgage market, the share of forbearance loans increased from 1.69% of total service volume to 2.44%.
There is a positive note, a decrease in wait times in call centers, “which indicates that the mortgage sector is adapting to the current environment by adding or reassigning staff and using more and more its websites to help borrowers, ”added Fratantoni.