After a slight decrease, the number of mortgages in coronavirus-related forbearance climbed 1 basis point between Dec. 7 and Dec. 13, according to the Mortgage Bankers Association.
Home loans in forbearance plans represent 5.49% (about 2.7 million homeowners) of all outstanding mortgages, up from 5.48% the week before. The share of forborne loans at independent mortgage bank servicers decreased to 5.95 from 5.98%, while depositories brought up the average, going to 5.41% from 5.38%.
Movement in the forbearance rate has been small over the last five weeks with neither a growth nor decline above 6 basis points. Though with recent spiking COVID-19 infections, this week’s rise wasn’t unforeseen.
“Additional restrictions on businesses and rising COVID-19 cases are causing a renewed increase in layoffs and other signs of slowing economic activity. These troubling trends will likely result in more homeowners seeking relief,” said Mike Fratantoni, the MBA’s senior vice president and chief economist. “Additionally, forbearance requests from Ginnie Mae borrowers reached the highest level since the week ending June 14.”
Ginnie Mae loans in forbearance – FHA, Department of Veterans Affairs and U.S. Department of Agriculture Rural Housing Service products – jumped to 7.79% from 7.68%.
Conforming mortgages – those purchased by Fannie Mae and Freddie Mac- continue to head the recovery, going from 3.25% from 3.26%. Meanwhile, private-label securities and portfolio loans – products not addressed by the coronavirus relief act – dropped to 8.76% from 8.89%.
An 18.78% share of all forborne mortgages sit in the initial forbearance stage, while 78.54% shifted to extended plans. The remaining 2.69% re-entered forbearance after exiting previously.