MBA Reports Flood of Mortgage Forbearance Requests
April 7, 2020
The Mortgage Bankers Association (MBA) has released its Forbearance and Call Volume Survey, highlighting the widespread mortgage forbearance requests from borrowers impacted by COVID-19, showing that the total number of loans in forbearance grew from 0.25 percent to 2.66 percent from March 2 to April 1, 2020, with mortgages backed by Ginnie Mae seeing the largest growth (from 0.19 percent to 4.25 percent). As of April 1, independent mortgage bank (IMB) servicers now have the largest share of loans in forbearance at 3.45 percent, reflecting their focus on Federal Housing Administration (FHA) and Veterans Affairs (VA) home loan programs.
Forbearance requests grew by 1,270 percent between the week of March 2 and the week of March 16, and another 1,896 percent between the week of March 16 and the week of March 30. The Survey also found that hold times increased to 17.5 minutes from under two minutes (three weeks prior) at servicer call centers.
"MBA's Survey highlights the immediate relief consumers are seeking as they navigate the economic hardships brought forth by the mitigation efforts to stop the spread of COVID-19," said Mike Fratantoni, MBA's senior vice president and chief economist. "The mortgage industry is committed to providing this much-needed forbearance as mandated by law under the CARES Act. It is expected that requests will continue to skyrocket at an unsustainable pace in the coming weeks, putting insurmountable cash flow constraints on many servicers—especially IMBs."
MBA initiated a weekly survey of forbearance and call center activity the week of April 1, 2020. MBA's survey data covers 22.4 million loans serviced as of April 1, 2020, representing almost 45 percent of the first mortgage servicing market. The sample size is expected to increase in the coming weeks as more servicers respond to requests for participation.
"To ensure that millions of Americans receive the support they need during the pandemic, it is incumbent upon the government to provide a lending facility to support the mortgage forbearance burdens placed on single-family and multifamily servicers, as they still need to forward principal and interest payments to investors," said Fratantoni.
A recent report from ATTOM Data Solutions found that the Northeast will have the largest concentration of the most at-risk counties, with clusters in New Jersey and Florida, while the West and Midwest have the smallest in terms of mortgage delinquencies. Last week, the U.S. Department of Housing & Urban Development (HUD) announced a mortgage payment relief options for single-family homeowners with FHA-insured mortgages who are experiencing financial hardship due to COVID-19.
“President Trump has said repeatedly combating coronavirus will take a whole-of-government response, so we are glad to see Congress come together and join in our efforts to provide relief for the American people," said HUD Secretary Ben Carson. "During this national emergency, HUD has taken action to further help our country’s most vulnerable citizens and this additional support from Congress will help us continue to fulfill that mission.”
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