WASHINGTON (Reuters) – Roughly 4.1 million U.S. mortgage borrowers have had their payments paused or reduced as the novel coronavirus outbreak hits household finances, but the increase in the number of people needing such help is slowing, the latest weekly survey from the Mortgage Bankers Association showed on Monday.
The share of mortgages in forbearance rose to 8.16% from 7.91% in the May 4-10 period, the industry lobbying group said, the smallest increase since March 16. The number of new requests for relief also fell relative to the prior week for the fifth consecutive survey period, the MBA said.
Ginnie Mae loans once again had the highest percentage of loans in forbearance by investor type, at 11.26% of loans. The share of Fannie Mae and Freddie Mac loans in forbearance increased to 6.25% from 6.08%.
The U.S. economy has cratered since mid-March as many stay-at-home orders were enacted across the country to limit the spread of the virus. Job losses have continued to mount, with more than 30 million people newly thrown out of work, although a majority of states have now partially reopened commerce.
“We will continue to closely monitor the forbearance request and call volume data for any sign of an uptick, but current trends suggest that if the economy continues to gradually reopen, the situation could be stabilizing,” said Mike Fratantoni, MBA’s senior vice president and chief economist.
As part of the $3 trillion financial relief package passed by Congress, borrowers with loans backed by Fannie Mae, Freddie Mac and Ginnie Mae can get six months of forbearance if they have been impacted by the coronavirus outbreak, with a six-month extension possible. This covers 70% of the mortgage market.
Many banks and other lenders of non-agency mortgages are also allowing borrowers to enter into forbearance plans, usually for at least three months.
MBA’s survey included data on 38.3 million loans, almost 77% of the first-mortgage servicing market.
(Reporting by Lindsay Dunsmuir; Editing by Paul Simao)