Virus spurs jump in US mortgage loan forbearances

Washington

THE number of people in the US with mortgages seeking to have their payments paused or reduced jumped between March 30 and April 5 as the economic effects of the novel coronavirus outbreak stretches household balance sheets.

This is according to a survey conducted by the Mortgage Bankers Association (MBA), the findings of which were released on Monday.

The share of mortgage loans in forbearance rose to 3.74 per cent from 2.73 per cent during the reporting period, the industry lobbying group said. Ginnie Mae loans grew the most, to 5.89 per cent from 4.31 per cent. For Fannie Mae and Freddie Mac loans, 2.44 per cent were in forbearance, up from 1.69 per cent the prior week.

That compared with only 0.25 per cent of all loans in forbearance for the week of March 2. The number of requests for mortgage relief also rose.

The US has the world's highest number of confirmed cases of Covid-19 with nearly 600,000 infections and almost 24,000 deaths.

The number of Americans seeking unemployment benefits in the last three weeks topped 15 million, Labor Department data released last week showed.

"The nationwide shutdown of the economy continues to create hardships for millions of households, and more are contacting their servicers for relief in accordance with the forbearance provisions under the Cares Act (Coronavirus Aid, Relief and Economic Security Act)," said Mike Fratantoni, MBA's senior vice-president and chief economist. REUTERS