For the third consecutive week, the total number of mortgage loans in forbearance fell.
According to the Mortgage Bankers Association, the rate fell by nearly 9 percent in the last week of June.
In addition, Fannie Mae and Freddie Mac loan in forbearance statuses declined to 6.17 from 6.26, marking four weeks of progress.
Unfortunately, about 4.2 million homeowners entered into forbearance as they struggled to fend off the economic fallout brought on by the COVID-19 pandemic.
An improving job market, however, appears to support the charge of fewer distressed homeowners. The improvement and data on forbearance is broad based, indicating an increase in various types of loans.
More good news is expected in the coming weeks as homeowners’ requests for assistance are also on the decline. Homeowners have found various methods to get back on track, using a blend of programs to find their financial footing and opt out of forbearance.
The number of individuals exiting forbearance through modifications grew from 4.3 percent to 8.3 percent; deferral cases grew from 9.3 percent to 16 percent.
As the COVID-19 pandemic intensified, more lenders and banks worked with their customers to find a plan that works for them.
A forbearance does not forgive the debt, and it may lead to credit score changes. It’s important to know that refinancing may not be possible when homeowners elect to move forward with this option.
Forbearance guidelines remain unclear as to how servicers and investors will handle repayment. It can take various forms, including adding payments to the backend of the mortgage. Under this arrangement, homeowners need not worry about saving for a lump-sum repayment.
Anyone with questions about what course of action they should take regarding full payment, partial payment, deferment, or whether they should even take this step can contact us to learn more about their option.
Please rest assured that we will work closely with you to understand the possible benefits and consequences of each option.