Mortgage Forbearance and what you should know

Real Estate

Roughly 7.5% of home loans were in forbearance as of April 26, according to the latest tracking survey conducted by the Mortgage Bankers Association. That translates to 3.8 million American homeowners with payment suspension plans—a percentage that is expected to keep climbing up.

"With millions more Americans filing for unemployment over the week, the level of job market distress continues to worsen,” said Mike Fratantoni, MBA's senior vice president and chief economist, in a press statement. “That is why we expect that the share of loans in forbearance will continue to grow, particularly as new mortgage payments come due in May."

To put this in perspective, the delinquency rate of all residential mortgages in the first three months of 2008, at the onset of the Great Recession, stood at nearly 3.7% before it escalated to 11.5% in the first quarter of 2010, according to the Federal Reserve Bank of St. Louis.

Find more information here: https://www.forbes.com/sites/dimawilliams/2020/05/06/before-you-request-mortgage-forbearance-here-is-what-you-should-know-about-its-effects-on-your-credit-score-future-home-loans-and-other-options/#77e43daa40e0