An Uptick in Mortgage Forbearances For The First Time in 3 Weeks

An Uptick in Mortgage Forbearances For The First Time in 3 Weeks

An Uptick in Mortgage Forbearances For The First Time in 3 Weeks – According to Black Knight, the latest data from their McDash Flash Forbearance Tracker indicated that the number of homeowners currently in forbearance plans increased this week after seeing three consecutive weeks of declines. In the past week, the number of active forbearance plans rose by 79,000, canceling out roughly half of the improvement seen since the peak on May 22.

As of Tuesday, 4.68 million homeowners were in forbearance plans, allowing them to delay their mortgage payments for at least three months. This represents 8.8% of all active mortgages, up from 8.7% last week. In the previous week, the number of borrowers in forbearance plans fell by 57,000. Forbearance plan increases were seen every day for the past five business days stated the report.

When entering forbearance, your mortgage payments are suspended until the end of the forbearance period. Those payments can be remitted either in repayment plans, loan modifications, or when the home is sold or the mortgage refinanced. The CARES Act, which was signed into law in March, allows borrowers to miss monthly payments for at least three months and potentially up to a year.

Mortgage bailout numbers were expected to improve as the economy reopened and with the slowing of job losses. However, the uptick in recent mortgage forbearance plans shows that homeowners are still struggling as COVID-19 cases continue to increase in several states.

Active Forbearance Plans

According to the report by Black Knight, 6.9% of mortgages backed by Fannie Mae and Freddie Mac are in forbearance, up from 6.8% last week. That’s a total of 1.93 million mortgages with $405 billion in unpaid principal. Although the numbers rose across all types of loans, they were sharpest for FHA/VA loans.  

FHA offers low down payment loans to borrowers with lower credit scores are particularly popular among first-time homebuyers. The number of forbearances for FHA backed home loans was 14.7%, up from 14.3%. The share of forbearances of VA loans was 7.5%, up from 7.3%. Together, FHA and VA loans represent $258 billion of unpaid principal, said Black Night.  

The number of private-market mortgages in forbearance was 9.6%. That’s a total of 1.5 million private-market mortgages in forbearance, up from 9.5% the previous week according to the report. Private-market mortgages are not backed by a government agency or a GSE (privately owned, but receive support from the Federal Government). The unpaid principal balance for those mortgages is $361 billion.

At today’s level, mortgage lenders may need to advance up to $3.5 billion/month to holders of government-backed mortgage securities on COVID-19-related forbearances. That’s in addition to the $1.4 billion in T&I payments (the balance in an escrow account used to pay for property taxes and insurance) they must make on behalf of borrowers.

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Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Call: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #314578

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Fannie Mae & Freddie Mac Offering Help to Homeowners During COVID-19 Crisis

Fannie Mae & Freddie Mac Offering Help to Homeowners During COVID-19 Crisis

Fannie Mae & Freddie Mac are extending help to millions of homeowners facing financial hardships as a result of COVID-19. 

Both Fannie Mae and Freddie Mac help stabilize mortgage markets and protect housing during extraordinary periods when stress or turmoil in the broader financial system threaten the economy such as the current COVID-19 pandemic.

Nearly half of the nation’s mortgages are owned or backed by Fannie Mae or Freddie Mac.

The swift wave of unemployment and financial hardships from furloughs, reduced wages, and commission cuts have left many homeowners worried about how they will make their mortgage payments in the coming months, but relief options are available.

If you are unable to make your mortgage payment, it’s important to call your lender as soon as possible. That said, reaching your lender can take some time because financial institutions are being bombarded with so many calls.

The Consumer Financial Protection Bureau provided guidance on what to do if you can’t pay your mortgage and what options are available as part of the Cares Act signed in law on March 27.

The CARES Act puts in place two protections for homeowners with federally backed mortgages:

  • A foreclosure moratorium
  • A right to forbearance for homeowners who are experiencing financial hardship due to the COVID-19 emergency

Both Fannie Mae & Freddie Mac are offering help to homeowners to get through this crisis without losing their homes. If you don’t have a federally backed mortgage, you still may have relief options through your mortgage servicer or from your state. 

To look up whether or not your mortgage is owned or backed by Fannie Mae or Freddie Mac, you can click these links:

Fannie Mae  

Fannie Mae said it will suspend foreclosure sales and evictions of borrowers for 60 days, according to the company statement. In addition, homeowners are eligible for a forbearance plan to reduce or suspend their mortgage payments for up to 12 months.

If Fannie Mae owns your mortgage loan, their Disaster Response Network™ (DRN) can help you navigate the mortgage relief process and address other financial challenges.

You can visit KnowYourOptions.com to learn about available mortgage assistance and relief options from Fannie Mae.

Freddie Mac

Freddie Mac is also taking action to help make sure homeowners with Freddie Mac-owned mortgages who are directly or indirectly impacted by COVID–19 are able to stay in their homes during this challenging time.

Freddie Mac is offering options like mortgage forbearance for up to 12 months, waiving of assessments of penalties and late fees, halting foreclosure actions and evictions of borrowers living in Freddie Mac-owned homes until at least May 17, 2020, and loan modification options that lower payments or keep payments the same after the forbearance period. 

You can learn more about Freddie Mac’s mortgage relief options to help homeowners by visiting My Home by Freddie Mac®.  

Borrowers who may be experiencing financial challenges due to COVID-19 are strongly encouraged to contact their mortgage servicer (the company listed on your monthly statement) so they can explore Fannie Mae and Freddie Mac’s workout options.

To be eligible for protections under the CARES Act, your mortgage must be federally owned or otherwise backed by one of the federal agencies and entities listed below:

Additional Mortgage Relief Options

Many states are implementing or considering various mortgage relief options, including the suspension of foreclosures, as well as additional assistance for homeowners. Check your state’s government website for details.

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Tom will take the time to listen to your needs and concerns, keep you informed every step of the way, and will go above and beyond to ensure a smooth and successful transaction.

To find out more about buying or selling Farmington Hills MI real estate, please contact Tom today at 248-790-5594 or you can get in touch here.

Tom Gilliam, REALTOR®
RE/MAX Classic
29630 Orchard Lake Rd.
Farmington Hills 48334
Call: 248-790-5594
Office: 248-737-6800
Email: Tom @ Homes2MoveYou.com
License #301741

 

 

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