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Loan Payment Relief Granted to 7% of U.S. Mortgage Borrowers

April 27, 2020, 8:00 PM

About 3.5 million U.S. homeowners -- 6.99% of borrowers -- received payment relief because of losses tied to the coronavirus outbreak, up from 5.95% a week earlier, according to the Mortgage Bankers Association.

Loans backed by Ginnie Mae -- mostly made to borrowers with lower credit scores and smaller down payments -- had the highest rate in forbearance at 9.73%, according to the Washington-based trade group’s survey covering the period through April 19. Other governnent-backed loans, by Fannie Mae and Freddie Mac, had a 5.46% forbearance rate. For privately issued loans, held by banks or other investors, 7.52% went into forbearance.

“We expect forbearance requests will pick up again as we approach May payment due dates,” MBA Chief Economist Michael Fratantoni said.

The $2.3 trillion stimulus act passed by Congress in March allows borrowers to request an initial 180 days to delay payments without penalty. Borrowers will be allowed to stretch out the repayments over time and avoid a lump sum catchup when the crisis passes, the regulator of Fannie Mae and Freddie Mac announced Monday.

Previously: Homeowners in Forebearance Top 3.4 Million: Black Knight

To contact the reporter on this story:
John Gittelsohn in Los Angeles at johngitt@bloomberg.net

To contact the editors responsible for this story:
Craig Giammona at cgiammona@bloomberg.net

Rob Urban, Christine Maurus

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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