Mortgage indulgence rates fell below 5 percent in March for the first time since the pandemic began, as homeowners resuming payments made more new requests for relief for the fourth straight week.
As of March 21, about 2.5 million homeowners were in forbearance plans, according to the Mortgage Bankers Association’s (MBA) latest MBA Forbearance and call volume survey. That’s 4.96 percent of all mortgages, down from 5.05 percent a week ago and a high of 8.55 percent in June 2020.
Percentage of forbearance mortgages according to Art
Credit: Mortgage Bankers Association
Almost one in five long-term borrowers has now passed the 12-month mark, said Mike Fratantoni, chief economist at the MBA.
“Many homeowners need this support, even if there is increasing evidence that the pace of economic activity is picking up as the vaccine rollout continues,” Fratantoni said. “Those who have ongoing hardship due to the pandemic and wish to extend their leniency beyond the 12 month period must contact their service technician. Servicers cannot automatically extend the forbearance terms without the borrower’s consent. “
In February the Biden Administration announced An extension of the registration window for applying for COVID Forbearance for FHA, VA, and USDA loans to June 30th. Homeowners who indulged on or before June 30, 2020 are also eligible for up to six months additional indulgence with these agencies.
Homeowners with mortgages backed by Fannie Mae and Freddie Mac can also qualify for three months of additional forbearance relief if included in a COVID forbearance plan from February 28, 2021.
Homeowners who have been granted COVID Forbearance are not expected to make up for their missed payments in one go. Depending on the agency supporting the 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 Find out more about their options on the website of the Consumer Financial Protection Bureau.