New survey findings released from the Mortgage Bankers Association (MBA) highlight the unprecedented, widespread mortgage forbearance already requested by borrowers affected by the spread of the coronavirus (COVID-19).
According to MBA’s Forbearance and Call Volume Survey, the total number of loans in forbearance grew from 0.25% to 2.66% from March 2 to April 1, 2020, with mortgages backed by Ginnie Mae seeing the largest growth (from 0.19% to 4.25%). As of April 1, independent mortgage bank (IMB) servicers now have the largest share of loans in forbearance (3.45%), reflecting their focus on Federal Housing Administration (FHA) and Veterans Affairs (VA) home loan programs, and serving low-to moderate income borrowers.
“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.”
Added Fratantoni, “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.”
Key findings of MBA’s Forbearance and Call Volume Survey
- Loans in forbearance among companies that provided data for the entire period from March 2 to April 1, 2020:
- Total loans in forbearance grew from 0.25% to 2.66%
- By investor type, Ginnie Mae loans grew the most: 0.19% to 4.25%
- Forbearance requests grew by 1,270% between the week of March 2 and the week of March 16, and another 1,896% between the week of March 16 and the week of March 30.
- Servicer call center volume:
- Hold times increased to 17.5 minutes from under two minutes (three weeks prior)
- Abandonment rates grew to 25% from 5% (three weeks prior)
- Loans in forbearance as percent share of servicing portfolio volume (#) as of April 1, 2020:
- Total: 2.73%
- IMBs: 3.45%
- Banks: 2.24%
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.