The share of home loans in forbearance grew last week, a situation that could worsen as millions file for unemployment.
Mortgages in forbearance plans made up 7.54 percent of servicers’ portfolios last week, according to figures released Monday by the Mortgage Bankers Association. That was up from 6.99 percent the week earlier and 5.95 percent for the week ending April 12.
Mike Fratantoni, MBA’s chief economist, said the pace of new requests slowed but noted that the market distress could worsen with millions of more Americans filing for unemployment.
“That is why we expect that the share of loans in forbearance will continue to grow, particularly as new mortgage payments come due in May,” Frantantoni said.
He added the silver lining is that as states across the nation start to re-open their economies, housing markets could start to see increased activity.
While the industry has been challenged by increased requests for forbearance, bigger problems may be coming six months down the line when homeowners have to resume payments.
Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229