4.2 million borrowers now in forbearance. Are servicers ready?
In today’s Daily Download episode, HW+ Managing Editor Brena Nath interviews Mortgage Bankers Association Senior Vice President and Chief Economist Mike Fratantoni on the giant uptick in forbearance requests in the industry, along with the impact these requests are having on the industry. According to the latest information from the MBA’s Forbearance and Call Volume Survey, as of May 17, the total number of loans now in forbearance now sits at 8.36%, meaning there are about 4.2 million homeowners now in forbearance plans.
When it comes to the biggest challenges that servicers are facing, Fratantoni said, “For servicers, one of the real challenges that they’ve been wrestling with is how to clearly communicate what those potential exits are from forbearance.”
“Thankfully, Fannie Mae and Freddie Mac have been out with some recent updates to their scripting and the launch of their deferral option, which we think in many cases is probably the most likely exit for a lot of borrowers,” he added.
Fratantoni also commented on the biggest challenges that lenders are dealing with, saying “On the lending side, there have been all kinds of complications for someone who does or does not miss pay their payments under forbearance. Does just the simple fact of being in forbearance alter their ability to get a refinance or buy a new home? That’s something that I think the FHFA and the GSEs are still struggling with.”
Fratantoni wraps up the interview by sharing his thoughts on the impact that the increase in forbearance requests could have on the potential for future delinquencies as borrowers start to exit forbearance at the end of this pandemic.
The Daily Download examines the most captivating articles reported from the HousingWire newsroom. Each afternoon, HousingWire provides its readers with a deeper look into the stories that are not only chronicling the biggest announcements within the housing and mortgage industries but are also helping Move Markets Forward. Hosted by the HW team and produced by Digital Producer Alcynna Lloyd.