More than 4.1 million American homeowners are now enrolled in mortgage forbearance plans, according to the latest data released from the Mortgage Bankers Association (MBA).

Although the mortgage industry has been hard hit with the influx of borrowers requesting relief from payments, MBA’s data indicates that the wave of forbearance requests may be gradually starting to wane.

As of May 10, 8.16 percent of all mortgages were in forbearance, with borrowers permitted to either skip or make reduced mortgage payments. That percentage rose from 7.91 percent as of May 3 — however, that was the slightest increase in proportion of borrowers in forbearance since March. Requests for forbearance also declined from 0.52 percent of total mortgage volume to 0.32 percent.

Mike Fratantoni | Photo credit: Mortgage Bankers Association

“There has been a pronounced flattening in loans put into forbearance — despite April’s uniformly negative economic data, remarkably high unemployment, and it now being past May payment due dates,” Mike Fratantoni, chief economist for MBA, said in a statement.

However, there’s reason to suggest that loans backed by Ginnie Mae, including Federal Housing Administration (FHA) and Veterans Affairs (VA) loans, have been impacted to a greater degree. These loans are often awarded to borrowers who are first-time homebuyers and likely have weaker credit — individuals, therefore, who may be more at-risk of facing financial hardship as a result of the economic downturn. Over 11 percent of Ginnie Mae loans are currently in forbearance.

Although recent data from Oxford Economics, a U.K.-based economic forecasting firm, estimated that 15 percent of homeowners would ultimately fall behind on mortgage payments, the slowing rate of forbearance requests is a positive sign. In addition, the consecutive increase in purchase applications over the past four weeks indicates that housing demand is bolstering as more states take steps to slowly reopen their economics, MBA’s report noted.

“We will continue to closely monitor the forbearance request and call volume data for any sign of an uptick, but current trends suggest that if the economy continues to gradually reopen, the situation could be stabilizing,” Fratantoni said.

Email Lillian Dickerson

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription