The rate at which borrowers suspended payments on their home loans rose for a second straight week between November 16 and 22, increasing 6 basis points to 5.54%, according to the Mortgage Bankers Association.
Even government-sponsored corporate loans, where indulgence rates have dropped for 24 consecutive weeks, rose slightly to 3.36% from 3.35% the previous week.
Ginnie Mae's forbearance rate also rose 10 basis points to 7.83%, and the portfolio and branded loan forbearance rate rose 15 basis points from 8.48% to 8.63%.
The increase could, in part, be a positive reflection of outreach campaigns aimed at raising awareness of the temporary payment facilities available. However, other indicators suggest that new problems are emerging in the market as well, according to Mike Fratantoni, chief economist at the MBA.
"There has been an increase in forbearance re-entries as borrowers who had previously left the company sought relief again," he said in a press release. Fratantoni also noted that out of indulgence, exits have slowed to a record low.
Last week, 20.3% of forbearance loans were in the initial plan phase, 77.42% were renewed, and the remaining 2.24% were re-entries.
A strong real estate market, fueled by tight supply relative to demand, low mortgage rates, and other temporary government measures, has helped offset the effects of suspended payments. However, there are concerns that expiring public programs and seasonal slowdowns could weaken market conditions.
"The latest real estate market data is still quite strong and we expect the market to be positioned for additional growth for next year. However, this data shows that additional support is likely to be needed over the winter," Fratantoni said.
His comments coincided with those of experts speaking at a real estate panel at the Information Management Network's ABS East virtual event Tuesday, predicting that expiring government programs could take some wind off the sails of the housing market.
"We had a lot of things to do, like cheaper funding, preventing evictions and foreclosures due to government regulations or initiatives." That helped us get through. So keep in mind that we most likely cannot continue at the same accelerated pace, ”said Mark Fontanilla, consultant at DBRS Morningstar, told IMN event attendees.