Suspended payments stabilized between Sept. 14 and Sept. 20 in part of the mortgage market where they had risen, according to the Mortgage Bankers Association.
The mortgage loan forbearance rate in Ginnie Mae securitizations, including those insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, remained unchanged at 9.15%. However, concerns about the suspension of payments activity in this part of the market persist.
“The recent increase in forbearance requests, especially for those with FHA or VA loans, leaves Ginnie Mae stock high,” Mike Fratantoni, senior vice president and chief economist of the MBA, said in a statement. Press.
The overall share of forbeared loans continued to decline in the latest MBA survey, dropping 6 basis points to 6.87% from 6.93% the week before. The share of Fannie Mae and Freddie Mac loans with suspended payments also continued to decline, falling 9 basis points to 4.46% from 4.55%.
After falling 19 basis points the week before, the share of forbearance in the private portfolio lending and residential mortgage-backed securities market remained at 10.52%.
Under the CARES Act, borrowers with government-linked loans can suspend payments for six months, with a one-time extension of six months if necessary. They must then repay the renounced amount.
The forbearance loans tracked in the latest MBA survey were broken down as follows: 68.37% were in extended plans, 30.26% were in the initial forbearance phase and the remaining 1.37% were loans that returned. in abstention after leaving it. This distribution is very similar to that observed a week earlier.
The monthly amounts repairers are charged to advance to investors due to forbearance total $ 6 billion, according to Black Knight estimates extrapolated from its McDash Flash data set last Friday. This total breaks down into $ 4.4 billion in principal and interest, and $ 1.6 billion in taxes and insurance.
The industry was granted limited relief from its responsibility to serve advances resulting from government intervention, such as monetary policy stimulus which fueled strong origination activity. But repairers remain concerned about having to temporarily cover payments borrowers fail to make.