Even though mortgage performance improved in March, financial hardship over the past year has caused the number of past due mortgage payments to increase.
While housing costs remain high, the total number of mortgage loans in forbearance decreased slightly in March. According to the Mortgage Bankers Association’s Loan Monitoring Survey, the number of loans in forbearance decreased by 2 basis points from 0.38% of servicers’ portfolio volume in the prior month to 0.36%. Of all loan holders in forbearance, a majority—or 76%—are in forbearance due to temporary hardships. Additionally, a majority of those in forbearance were in the initial stages of forbearance.
“Overall mortgage performance improved in March, with more borrowers making their mortgage payments and fewer borrowers in forbearance and loan workouts compared to the prior month,” said MBA’s Vice President of Industry Analysis Marina Walsh, CMB. “This monthly improvement may be tied to several factors such as receipt of tax refunds and homeowner recovery from natural disasters.”
Added Walsh, “The labor market is relatively healthy, which is helping mortgage performance remain strong. However, compared to one year ago, there are fewer borrowers current on their mortgages. Also, more borrowers in loan workouts – particularly those with FHA loans – are having difficulty staying current.”Read more
