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Apr 21, 2020

Nearly 3 million borrowers are already in forbearance

GSE loans in forbearance now exceed FHFA Director Calabria’s projection


It appears the forbearance issue is already much more significant than federal decision-makers thought it would be.

Federal Housing Finance Agency Director Mark Calabria told HousingWire last week that his expectation was that approximately 1 million GSE mortgages will be in forbearance by May, but new data from Black Knight shows that the number of GSE mortgages in forbearance already far exceeds Calabria’s projection.


According to Black Knight, nearly 1.4 million borrowers whose mortgages are backed by Fannie Mae and Freddie Mac are already in forbearance.

To ascertain this data, Black Knight reviewed a sample set of loans that represent the majority of the mortgage market and extrapolated that data across the entire mortgage landscape.

Black Knight’s data shows that overall, more than 2.9 million mortgages are in forbearance as of April 16. That figure represents 5.5% of all active mortgages.


In total, those loans represent $651 billion in unpaid principal balance.

The figure also shows just how quickly the number of borrowers needing forbearance is growing.

Data released earlier this week by the Mortgage Bankers Association showed that 3.74% of all borrowers were in forbearance as of April 5.



The data from Black Knight also shows that forbearance is more prevalent among loans backed by the Federal Housing Administration and the Department of Veterans Affairs.


According to Black Knight, 7.6% of the loans backed by the FHA and VA are currently in forbearance. Put another way, approximately 922,000 of the 12.1 million FHA and VA loans are in forbearance.


But the forbearance situation isn’t limited to GSE or government-backed loans.

According to Black Knight, nearly 5% of loans held either in portfolio or privately securitized are also in forbearance.




Chase stops accepting HELOC applications

Bank “temporarily pausing” on home equity lines of credit


Just a few days after it raised its lending standards to require nearly all purchase mortgage borrowers to have at least 20% down and a 700 FICO score, JPMorgan Chase is “temporarily pausing” its home equity line of credit offering.


Beginning April 16, Chase will no longer accept new HELOC applications. Customers with existing HELOCs will be able to continue to draw funds on those lines of credit, but the bank is not accepting applications for new HELOCs.


“Due to the economic uncertainty, we’re temporarily pausing new applications for home equity lines of credit,” Bonitatibus said. “Customers can still tap into their home’s equity through a cash-out refinance of their existing mortgage.”





32% of first-time buyers get financial help from a relative or friend: NAR

Limited income was the most cited factor holding back non-homeowners from saving, according to a new survey released Thursday by the National Association of Realtors


The first survey, conducted in July 2019, gathered 5,870 responses from U.S. homebuyers who had purchased a primary residence between July 2018 and June 2019. The survey found that during that period the median down payment was 12 percent for all buyers, six percent for first-time buyers and 16 percent for repeat buyers. By contrast, 30 years earlier (in 1989) the median down payment was 20 percent for all buyers, 10 percent for first-timers and 23 percent for repeat buyers.


In 2019, 16 percent of all buyers bought with down payment help in the form of a gift or loan from a friend or relative. That figure goes up to 32 percent for first time buyers and goes down to eight percent for repeat buyers. Between 2000 and 2019, the share of first-timers buying with the help of someone they knew was at a low of 27 percent in 2000 and peaked at 36 percent in 2010, staying between 29 percent and 33 percent ever since then.


More than a quarter of first-time buyers, 26 percent, said saving for a down payment was the most difficult task in the homebuying process compared to only seven percent of repeat buyers. Thirteen percent of buyers overall thought that was the hardest part.

Student loans were the expense most buyers cited as hampering their ability to save for a down payment, followed by credit card debt and car loans.