Two of the most economically vulnerable segments of the housing market are starting to feel pressure from the economic crisis caused by the coronavirus pandemic.
The share of mortgages backed by the Federal Housing Administration and the Veterans Administration rose to 10 percent in the Mortgage Bankers Association’s most recent survey, covering the week of April 13 to April 19. FHA and VA mortgages typically are taken out by first-time homebuyers.
Around 3.5 million mortgages nation-wide are in forbearance, making up 6.99 percent of the country’s mortgages, up from 5.95 percent the previous week. Only 0.25 percent of all loans were in forbearance for the week of March 2
“Forbearance requests fell relative to the prior week but remain roughly 100 times greater than the early March baseline. While the pace of job losses have slowed from the astronomical heights of just a few weeks ago, millions of people continue to file for unemployment. We expect forbearance requests will pick up again as we approach May payment due dates,” MBA Senior Vice President and Chief Economist Mike Fratantoni said in a statement. “The combination of stimulus payments, expanded unemployment insurance benefits, further fiscal and monetary actions, and states reopening will hopefully begin to stabilize forbearance requests and the overall economy.”
Mortgages backed by Ginnie Mae once again showed the largest growth – increasing from 8.26 percent to 9.73 percent – from the prior week and had the largest overall share of loans in forbearance by investor type. The number of loans in forbearance for depository servicers rose to 7.87 percent, while the number of loans in forbearance for independent mortgage bank servicers increased to 6.52 percent. The share of Fannie Mae and Freddie Mac loans in forbearance increased relative to the prior week: from 4.64 percent to 5.46 percent. The share of other loans in private label securities and portfolio loans in forbearance increased relative to the prior week: from 6.43 percent to 7.52 percent. Forbearance requests as a percent of servicing portfolio volume dropped relative to the prior week: from 1.79 percent to 1.14 percent.
