Mortgage payments paused or reduced for 3 million US households, survey suggests

[WASHINGTON] Some 3 million US households have won at least a measure of relief on mortgage payments as efforts to squelch the coronavirus pandemic throw millions out of work and stretch household balance sheets, a survey from the Mortgage Bankers Association showed on Monday.

About 5.95 per cent of mortgage loans were in forbearance during the survey week of April 6-12, up from 3.74 per cent a week earlier and from just 0.25 per cent the week of March 2, the industry lobbying group said on Monday.

That increase helps builds the case for a rescue for the mortgage services industry, suggested Mike Fratantoni, MBA's senior vice president and chief economist.

"To ensure market stability during these challenging times for consumers and the entire industry, servicers need access to interim financing so that they can continue to play this critical role," Mr Fratantoni said.

Congress did not include any such relief in its recent US$2.3 trillion stimulus package, though some top Democrats have called for it and Dallas Fed President Robert Kaplan has said he is open-minded about potentially coming to the sector's aid.

The survey covered 38.3 million loans serviced by independent mortgage companies and banks, representing about 77 per cent of the first mortgage-servicing industry. Extrapolating the figures from the survey to the entire universe of loans suggests nearly 3 million US homeowners are getting some type of forbearance on their loans.

More than 95 per cent of Americans are under "stay-at-home" or "shelter-in-place" orders. The United States has the world's highest number of confirmed cases of COVID-19, the respiratory disease caused by the coronavirus.

The number of Americans seeking unemployment benefits in the last month has topped 22 million, Labour Department data released last week showed.

REUTERS