Mortgage Broker

Mortgage servicers seek government aid as forebearance requests soar





CNBC’s Diana Olick reports on the drama in the mortgage industry.

Mortgage payments for the month of April are not even officially late until the 15th, but borrowers are flooding into the government’s mortgage forbearance program.

Requests to delay mortgage payments grew by 1,270% between the week of March 2 and the week of March 16, and another 1,896% between the week of March 16 and the week of March 30, according to numbers released Tuesday by the Mortgage Bankers Association. It includes data on 22.4 million loans serviced as of April 1, almost 45% of the first lien mortgage servicing market.

The Cares Act, which President Donald Trump signed March 27, seeks to limit the economic damage from COVID-19. The government implemented the mortgage relief measures before Trump signed the bill. It mandates that all borrowers with government-backed mortgages — about 62% of all first lien mortgages according to the Urban Institute — be allowed to delay at least 90 days of monthly payments and possibly up to a year’s worth. Those payments must ultimately be remitted either at the end of the loan term or in a structured modification plan.

For the week of March 23 through March 29, caller requests numbered 218,718. That number jumped to 717,577 requests in the following week, according to a Mortgage Bankers Association calculation. Mortgage servicers are required to grant forbearance to any borrower who requests it with no documentation of hardship necessary.

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4 comments

  1. wow, they are kinda whiny and really clingy to the fed… Fed should just bail them out… lame

    Reply
  2. Too little to late for this Fed's bailouts housing market.

    Reply
  3. So they want our money again. DEMONCRATS and REPUNGELICANS will get kickback from lobysts and give them our money in Return. Wait and see Folks. A business should fail if it fails. You go into business to succeed or fail. Not to be bailed out. Let them line up with us and apply for unemployments.

    Reply
  4. Let them fail

    Reply

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