Mortgage indulgence fell below 5 percent in March for the first time since the pandemic began, as homeowners resuming payments made more new requests for relief for the fourth straight week.
As of March 21, about 2.5 million homeowners were in forbearance plans, according to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey. That’s 4.96 percent of all mortgages, down from 5.05 percent a week ago and a high of 8.55 percent in June 2020.
Percentage of forbearance mortgages according to Art
Credit: Mortgage Bankers Association
Nearly one in five long-term borrowers has now passed the 12-month mark, said Mike Fratantoni, chief economist at the MBA.
“Many homeowners need this support, even if there is increasing evidence that the pace of economic activity is picking up as the vaccine rollout continues,” Fratantoni said. “Those who have ongoing hardship due to the pandemic and wish to extend their leniency beyond the 12 month period must contact their service engineer. Servicers cannot automatically extend the forbearance terms without the borrower’s consent. “
In February, the Biden administration announced an extension of the registration window for applying for COVID Forbearance for FHA, VA, and USDA loans through June 30th for Forbearance from these agencies.
Homeowners with mortgages backed by Fannie Mae and Freddie Mac can also qualify for three months of additional leniency relief if they are enrolled on a COVID forbearance plan starting February 28, 2021.
Homeowners who have been granted COVID Forbearance are not expected to make up for their missed payments in one go. Depending on the agency supporting the loan, they may be able to complete a repayment plan, apply for a loan modification, or defer repayment until they refinance or sell their home. Homeowners and renters can learn more about their options on the Consumer Financial Protection Bureau website.
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