Home Topics Real Estate The indulgence rate drops for the seventh straight week

The indulgence rate drops for the seventh straight week

Mortgage Forbearance’s share of indulgence continues to pull back from last summer’s highs, but around 2.3 million homeowners are still taking a break from their monthly mortgage payments, according to the latest figures from the Mortgage Bankers Association (MBA).

The MBA’s weekly Forbearance and Call Volume Survey found that the forbearance rate fell to 4.5 percent for the seventh time in a row on April 11, 2021. This is 18 times higher than the pre-pandemic 0.25 percent rate, but has improved significantly from a high of 8.55 percent in June.

Forbearance rates were lowest for mortgages covered by Fannie Mae and Freddie Mac (2.44 percent) and highest for personal loans (8.34 percent). The forbearance rate for Ginnie Mae securitized FHA, VA, and USDA mortgages was 6.16 percent.

“Economic data for housing and consumer spending in March shows a strong housing market and an accelerating pace of economic activity,” said Mike Fratantoni, chief economist at the MBA, in a statement. “Combined with the support from homeowners and the stimulus payments that many households are receiving, we expect the leniency figures to continue to decline in the coming months as more people find work.”

About a third of borrowers who have been granted Extended Forbearance have now been more than 12 months without loan payment, Fratantoni said. Borrowers on mortgages backed by Fannie Mae, Freddie Mac, FHA, VA, and USDA can have COVID forbearance for up to 18 months.

There is concern that some borrowers are at risk of losing their homes if they cannot resume payments. The Consumer Financial Protection Bureau has proposed a moratorium on foreclosures through December 31, 2021 – a rule that would also apply to personal loan service providers.

Most COVID-Forbearance homeowners are not expected to make up for their missed payments in one go. Depending on the type of 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.

Email Matt Carter

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest articles

From Believe’s $ 600 million IPO to Hipgnosis and Influence Media’s catalog offerings, it’s MBW’s weekly roundup

Welcome to Music Business Worldwide's weekly recap we make sure you got the top five stories of the past seven days in our headlines....

5 mistakes new coaches should avoid

Let my pain be your gain as I've rounded up some common mistakes coaches make early in their careers. When I started exercising clients, I...

MicroVision vs. Luminar Technologies: Which Lidar Stock is a Better Buy?

© Reuters. MicroVision vs. Luminar Technologies: Which Lidar Stock is a Better Buy? MicroVision (MVIS) and Luminar Technologies (LAZR) are two companies targeting the...