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Forbearance Requests Slow to a Trickle

June 2nd, 2020

7.2% of mortgages back by Fannie Mae and Freddie Mac have suspended payments

May 29, 2020, 4:44 pm By 

Requests for help from borrowers have slowed with the total number of mor

tgages in forbearance at about 4.8 million, Black Knight said on Thursday.

Only 7,000 mortgages entered forbearance this week, Black Knight said.

“Volumes of forbearance plans have flattened, and in fact new inflows have slowed to a relative trickle,” the mortgage data firm said in a statement.

The overall share of home loans with suspended payments stands at 9%, Black Knight said. Broken out by investor types, 7.2% of mortgages backed by Fannie Mae and Freddie Mac are in forbearance. That’s a total of 2 million mortgages.

The forbearance share for home loans backed the Federal Housing Administration and the Veterans Administration was 12.6%, or 1.5 million mortgages.

At this week’s level for all types of mortgages in forbearance, servicers need to advance a combined $3.6 billion a month in principal and interest payments to holders of government-backed mortgage securities on COVID-19-related forbearances, the report said.

That’s on top of the $1.5 billion in payments for taxes and insurance they are required make on behalf of borrowers. Typically those so-called T & I payments come out of a mortgage holders escrow fund they pay into every month.

American mortgage holders have swamped servicers with forbearance requests in the months following the start of the COVID-19 pandemic. Requests are slowing as more people go back to work and are able to pay their bills.

Jobless claims since March have topped 40 million, meaning layoffs have hit 1 in 4 American workers, according to a report from the Labor Department on Thursday.

But, the data showed some workers have been rehired. Continuing claims that measure the total number of people receiving unemployment benefits declined for the first time since the start of the pandemic.

The number of people receiving jobless benefits dropped by about 3.8 million to 21.1 million as some people were rehired, according to jobs report.