This post was originally published on this site
Fewer Americans now have agreements with their mortgage servicers to skip their monthly payments.
Getty Images/iStockphoto
Fewer than 4 million homeowners across the U.S. are skipping their mortgage payments, according to new estimates from the Mortgage Bankers Association released Monday.
The trade group reported that only 7.8% of mortgage loans nationwide were in forbearance as of July 12, equating to roughly 3.9 million homeowners. It represents the smallest share of loans in forbearance in more than two months.
The percentage of Americans in forbearance on their home loans has fallen for five consecutive weeks. A record number of Americans requested forbearance as the coronavirus pandemic upended the country’s economy. A provision in the CARES Act allowed anyone with a federally-backed mortgage, including loans backed by Fannie Mae FNMA, -0.95% and Freddie Mac FMCC, -1.40%, to receive forbearance.
As states have lifted coronavirus-related stay-at-home orders, the labor market has bounced back, resulting in fewer Americans skipping their loan payments.
Read more: If you’re skipping your mortgage payments, watch out for this costly mistake
“Almost half of borrowers remaining in forbearance are now in an extension of the original term, while the remainder are in their initial forbearance plan,” Mike Fratantoni, chief economist at the Mortgage Bankers Association, said in the report.
“The pace of new forbearance requests remains quite low compared with earlier in the crisis, but we are watching carefully for any increases due to either the pickup in COVID-19 cases or the cessation of enhanced unemployment insurance benefits at the end of this month,” he said.
Under the CARES Act, mortgage servicers were required to provide up to 12 months of relief from mortgage payments. In many cases, servicers granted forbearances for a few months, giving homeowners the option to then request an extension.
