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Biden rolls out enhanced mortgage aid – can it curb foreclosure spike?

July 26,2021 | By Erickson Ocasio

New loan modifications aim to keep more borrowers in their homes The Biden administration is offering delinquent borrowers new loan modifications and payment reductions in a bid to help them stay in their homes after the foreclosure moratorium expires on July 31. The White House on Friday said that homeowners with government-backed mortgages that have been negatively impacted by the pandemic will receive enhanced assistance. The new steps aim to extend the length of their mortgages up to 40 years and lower monthly principal and interest (P&I) payments by 25% to ensure borrowers can afford to stay in their homes. The additional options come a month after the Centers for Disease Control and Prevention extended the nationwide eviction and foreclosure bans until the end of July, which CDC director Dr. Rochelle Walensky promised would be the last time they would do so. Un

Forbearance share dips as re-entries increase

June 4,2021 | By Erickson Ocasio

The share of mortgages in forbearance was down for the 13th straight week, as forbearance exits continue to move at a slower pace, according to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey. As of May 23, forbearance rates inched down to 4.18% of servicers’ portfolio volume, a one-basis-point drop from the previous week. MBA estimated that 2.1 million homeowners are currently in forbearance plans. “Forbearance re-entries increased to almost 5.6%, as more homeowners who had canceled forbearance needed assistance again,” said Mike Fratantoni, senior vice president and chief economist at MBA. “There was also an increase in the share of PLS and portfolio loans in forbearance, while the share for Fannie Mae, Freddie Mac, and Ginnie Mae loans decreased.” The share of Fannie Mae and Freddie Mac loans in forbearance dwindled two basis points to 2.19%. Forbearance share for G

What’s the impact of the end of forbearance?

June 1,2021 | By Erickson Ocasio

On June 30 of this year, the federal forbearance program is set to end. While it’s been extended a few times before, it appears that given the pace of recovery a blanket forbearance program probably won’t be renewed again. Current data puts somewhere between two million and 2.5 million loans in forbearance programs, representing 4-5% of all mortgages. While the pace of economic recovery has seen that number decline significantly, we could very quickly start running into a group of borrowers facing far more chronic financial issues who can’t be brought out of forbearance as easily. “The reality is that many there are many borrowers that will be financially distressed for an extended period of time as local segments of the economy – both in terms of geography and market sector – are forced to transform themselves in a post-COVID world,” said Andrew Wang (pictured), CEO of tech-driven servicing firm Valon. “This latent popu

Forbearance is nearing its end and over 5% of borrowers are still in the program

February 5,2021 | By Erickson Ocasio

We’re approaching the one-year anniversary of mortgage forbearance programs and while many American borrowers have gotten off the program for one reason or another, a frustrating number of homeowners remain. A little less than 5.5% of homeowners are still missing mortgage payments, representing a group of homeowners who have not gotten back on their feet since the initial COVID-related lockdowns in spring of 2020. This group of borrowers represents a significant policy challenge, as well as a potential risk to the country’s current hot housing market and ongoing rapid house price appreciation. According to Matt Tully (pictured), VP of agency affairs and compliance at Sagent Lending Technologies, these borrowers and the wider industry can take some hope in the Biden administration’s promise to address the issue. However, there are still a number of challenges ahead and individual mortgage pros may play a crucial role in the months to come.

Bank of America provides mortgage relief amid COVID-19 pandemic

December 23,2020 | By Erickson Ocasio

Bank of America has announced that it is allowing customers to defer mortgage payments during the financial crisis caused by the coronavirus pandemic. The move, the bank said, is part of a series of measures aimed at easing the financial burden on its customers. Clients can also request to defer payments on deposit accounts, credit cards, and small business and auto loans. Customers who wish to request loan payment deferments can call the bank’s client services number to discuss their hardships. "Our clients rely on us every day and for every aspect of their financial lives," Dean Athanasia, president of Consumer and Small Business at Bank of America, said in a statement. "We're going to continue to provide convenient access to the important services they count on, and the additional assistance and support they need during this difficult period." The bank also said it has temporarily halted foreclosure

Forbearance rates are going down, but for how much longer?

November 17,2020 | By Erickson Ocasio

Forbearance rates have declined for the 11th week in a row, according to the Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey. The total number of loans now in forbearance decreased to 5.47%, down from 5.67%. MBA estimates 2.7 million homeowners are still in forbearance plans. While a declining forbearance rate is good news for the US economy, that doesn’t mean these remaining borrowers are all in the clear. Marina Walsh, vice president of industry analysis research and economics at the MBA, explained why that last 5% may prove slower to emerge from forbearance. She highlighted, too, why IMBs seem to be carrying a higher forbearance rate than the big banks. “If you take all the forbearance exits from June 01 to November 08, about one third were leaving forbearance without any arrears,” Walsh said. “There was no need for a loss mitigation strategy, they were leaving for good reasons. Reinstateme

Forbearances tick back up above 3 million

October 30,2020 | By Erickson Ocasio

The number of mortgages in active forbearance has ticked back up above 3 million, rising by 31,000 over the last week, according to new data from Black Knight. The increase was driven by limited extension and removal activity and a jump in forbearance starts. There were 50,000 forbearance removals this week – the fewest of any week since the recovery began, according to Black Knight. The 89,000 extensions this week were the fewest in nine weeks. Meanwhile, some 33,000 new forbearance plans started over the past week. “In total, forbearance plan starts are up 15% in October compared to the month prior, with the rise driven by borrowers reactivating previously expired plans,” Black Knight said in an email to MPA. “New forbearance activations are down 7% from September, while reactivations are up 50%. This is most likely in reaction to the large volume of plans that were removed early in the month.” With 365,000 more forbearan