Requests to delay mortgage payments jump nearly 2,000% as borrowers seek immediate relief during the coronavirus outbreak

  • Data from Mortgage Bankers Association (MBA) shows that forbearance requests grew by 1,270 per cent between week of March 2 and week of March 16
  • That number jumped another 1,896 per cent between March 16 and March 30
  • Last month, President Donald Trump signed the CARES Act, which allows for a three to six month delay in mortgage payments
  • But at end of grace period, borrowers will be required to pay entire lump sum

By Valerie Edwards For Dailymail.com

Published: 22:07 BST, 7 April 2020 | Updated: 22:39 BST, 7 April 2020

The coronavirus outbreak has put millions of people out of jobs as companies furlough workers and businesses are forced to lay off employees. 

More than 10 million Americans are now jobless and desperately trying to keep the roofs over their heads.

That need has resulted in a nearly 2,000 per cent jump in requests to delay mortgage payments as borrowers seek immediate relief amid the pandemic, according to a new survey.  

More than 10 million Americans are now jobless and desperately trying to keep the roofs over their heads. That need has resulted in a nearly 2,000 per cent jump in requests to delay mortgage payments as borrowers seek immediate relief amid the pandemic. People are seen in line to receive the printed Unemployment Benefits applications in Florida on Tuesday

More than 10 million Americans are now jobless and desperately trying to keep the roofs over their heads. That need has resulted in a nearly 2,000 per cent jump in requests to delay mortgage payments as borrowers seek immediate relief amid the pandemic. People are seen in line to receive the printed Unemployment Benefits applications in Florida on Tuesday

According to data released Monday by the Mortgage Bankers Association (MBA), forbearance requests grew by 1,270 per cent between the week of March 2 and the week of March 16.

That number jumped another 1,896 per cent between the week of March 16 and the week of March 30.

‘MBA’s survey highlights the immediate relief consumers are seeking as they navigate the economic hardships brought forth by the mitigation efforts to stop the spread of COVID-19,’ said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist.  

Last month, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which allows for a three to six month delay in mortgage payments. 

Fratantoni added that the ‘mortgage industry is committed to providing this much-needed forbearance as mandated by law under the CARES Act’.

But at the end of the grace period, borrowers will be required to pay the entire lump sum.

Last month, President Donald Trump signed the CARES Act, which allows for a three to six month delay in mortgage payments (file image). But at the end of the grace period, borrowers will be required to pay the entire lump sum

Last month, President Donald Trump signed the CARES Act, which allows for a three to six month delay in mortgage payments (file image). But at the end of the grace period, borrowers will be required to pay the entire lump sum

Last month, President Donald Trump signed the CARES Act, which allows for a three to six month delay in mortgage payments (file image). But at the end of the grace period, borrowers will be required to pay the entire lump sum

Because of this, experts have been advising that those who can pay their mortgage do so in the coming months; otherwise, they will have to pay a much larger amount after the grace period.  

And to make matters worse, Fratantoni said it’s ‘expected that requests will continue to skyrocket at an unsustainable pace in the coming weeks, putting insurmountable cash flow constraints on many servicers’ especially independent mortgage bank servicers. 

The data from MBA also showed that loans in forbearance between March 2 to April 1, 2020 grew from 0.25 per cent to 2.66 per cent.

Ginnie Mae loans grew the most from 0.19 per cent to 4.25 per cent.  

MBA’s survey data covers 22.4 million loans serviced as of April 1, 2020, representing almost 45 per cent of the first mortgage servicing market.  

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