The Mortgage Bankers Association (MBA) reported an increase in mortgage forbearance rates to 0.27% as of July 31, 2024, from 0.23% the previous month, primarily due to recent natural disasters. This uptick reflects an additional 20,000 homeowners seeking relief, bringing the total to approximately 135,000. Since the onset of the COVID-19 crisis in March 2020, about 8.2 million borrowers have benefited from forbearance plans.
Marina Walsh, MBA’s vice president of industry analysis, highlighted that natural disasters accounted for 27% of all forbearance cases last month, a significant increase from 16% in June. Despite this rise, overall loan performance showed slight improvement, with the percentage of current loans increasing to 95.76% from 95.65%. However, this still lags behind figures from May.
The survey detailed specific increases in forbearance rates across different loan types:
- Ginnie Mae loans saw a 12 basis point increase to 0.56%.
- Fannie Mae and Freddie Mac loans increased by one basis point to 0.12%.
- Portfolio and PLS loans rose by two basis points to 0.33%.
Most borrowers in forbearance cited temporary hardships like job loss or natural disasters, with only 6.6% due to ongoing effects of the COVID-19. This data underscores the ongoing challenges faced by homeowners, particularly in disaster-prone areas, and highlights the role of forbearance as a critical financial safety net.
Expanded article: Mortgage Forbearance Rates Up