1 in 4 Homeowners in Forbearance Still Paying Their Mortgage
About 25% of owners seemingly have mortgage forbearance as a preventative measure, “one of the most surprising aspects of this entire episode,” says a mortgage banker VP.
NEW YORK – About 25% of all homeowners who demanded forbearance are still current on their mortgages as of Sept. 6, according to the latest Mortgage Bankers Association (MBA) data. Of 3.4 million households currently in forbearance, roughly 820,000 haven’t missed a payment.
Of those people who keep paying, 23% are Ginnie Mae borrowers, 20.6% are conventional-loan borrowers, and 28.6% of loans on banks’ balance sheets are current.
“That has been one of the most surprising aspects of this entire episode,” says Mike Fratantoni, MBA’s senior vice president and chief economist. “We’ve seen that share come down over time because some of those borrowers have exited forbearance.”
Observers call it “strategic forbearance,” with many homeowners taking on the option just in case.
“So long as the job market keeps improving and the housing market is in solid shape, there is a good potential for this to keep improving,” Fratantoni says.
Source: Bloomberg (10/07/20) Maloney, Christopher
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