As of the week ending May 31, the number of mortgages in forbearance increased slightly to 8.53 percent, from 8.46 percent the week prior, according to data from the Mortgage Bankers Association. That means about 4.3 million homeowners had forbearance plans.
“With the job market beginning to gradually improve, more homeowners are exiting forbearance, and we are seeing declines in forbearance volume among some servicers,” Mike Fratantoni, MBA’s chief economist said in a statement. “However, this week’s findings did reveal divergence among servicers.”
The share of Ginnie Mae loans in forbearance rose to 11.83 percent, from 11.82 percent, which is a slight increase but these borrowers still make up the overall largest share of loans in forbearance by investor type. Fannie Me and Freddie Mac loans barely ticked up to 6.4 percent, from 6.39 percent, but private-label securities and portfolio loans rose to 10.03 percent, from 9.67 percent.
The rate of requests for forbearance plans has been slowing throughout the past several weeks – and continued that decline for the eighth consecutive week.
MBA’s data covers 76 percent of the first-mortgage servicing market or about 38.2 million loans.
However, other data shows that the amount of Americans with forbearance plans has actually begun to decline. According to Black Knight, as of June 2 the net number of households with payments on pause fell for the first time since forbearance plans became widely available under the CARES Act in March. About 8.9 percent of mortgages were in forbearance, accounting for slightly more than $1 trillion in unpaid principal, according to its reading.
There could be more positive news on the horizon for the housing market, as the U.S. economy added a shocking 2.5 million nonfarm payroll positions in May, and the unemployment rate fell to 13.3 percent. Wall Street had expected a loss of millions of additional positions, as well as an uptick in the read on unemployment.