Mortgage

Forbearance stays unchanged for the primary time in 10 weeks

According to the Mortgage Bankers Association, the rate of forbearance-related coronavirus mortgages flattened between August 17 and 23.

After 10-week declines since June 7, the interest rate was 7.2% from the previous week – an estimated 3.6 million mortgages. In a reversal last week, the proportion of forborne loans held by independent mortgage lenders fell from 7.43% to 7.41%, while depositaries rose from 7.48% to 7.49% over the same period.

"The forbearance share of lending remained unchanged as the decline in the share of GSE lending was offset by increases in Ginnie Mae, as well as portfolio and PLS lending. The pace of new indulgence has been relatively flat for all types of investors, but for." At GSE loans, the rate of forbearance outcomes regularly exceeds the rate of new inquiries, "said Mike Fratantoni, senior vice president and chief economist of the MBA, in a press release.

"The exception to these trends are borrowers on Ginnie Mae loans," he wrote. "The loss of improved unemployment insurance benefits in connection with a consistently high layoff rate and uncertainty about the labor market has a disproportionate effect on FHA and VA." Borrower. "

The leniency rate of compliant mortgages – bought by Fannie Mae and Freddie Mac – decreased from 4.93% to 4.88%. Ginnie Mae's loans – Federal Housing Administration, Department of Veterans Affairs, and US Department of Agriculture – rose from 9.54% to 9.58%.

Private label securities and portfolio loans – products not covered by the Coronavirus Relief Act – continued to rise from 10.37% to 10.44%.

Forbearance requests as a percentage of the service portfolio volume remained from 0.11% to 0.1%, while the call center volume as a percentage of the portfolio volume decreased from 8.7% to 7.2%.

As the movement stalled in this week's poll, uncertainty lies ahead. Last week the Federal Housing Agency extended its enforcement moratorium until the end of 2020. The identification of the best possible treatment of the problem and its solution remains extremely fluid, especially with the upcoming presidential elections.

"Being lenient, writing checks and introducing foreclosure moratoriums is relatively easy. The management of the backend becomes much more nuanced," said Dan Sogorka, CEO of Sagent, in an interview.

"A lot has to do with what's going on with the economy, the political spectrum, and unemployment. The amount of money the government is putting into this problem is amazing, as is politics. Most of all, that's COVID. We are Or do we have a second and third wave and a crapshoot around vaccines. All of this is based on a growing backlog of people who would normally have been left out in normal and reasonable ways and are not closed off. "

The MBA sample for this week's survey includes a total of 49 servicers with 26 independent mortgage lenders and 21 custodians. The sample also included two subservicers. Based on the number of units, respondents accounted for around 75% or 37.3 million of the outstanding first liens.

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