The Forbearance Can is Continuing to Be Kicked


Filed under: Market Comentary


Headline this morning: Mortgage Delinquencies Fell Below 6% for the First Time Since March. That sounds like good news! What is 6% relative to? How does it shape up compared to where we really stand?

Mortgage Delinquencies Are Down

The good news is that serious delinquencies ticked down 1/10th of 1%. Not a huge number, but we are still over 5x what we were pre-COVID levels.

Obviously, a lot of this has to do with the forbearance issues that are going on. A big chunk of that 6% are people who are in forbearance.

Extended Forbearance Options

Another bit of news: conventional loans extended forbearance options through the end of March. You can continue to defer those payments if desired. Loans through FHA and USDA (though HUD) have been extended through June 30th.

They are continuing to “kick the can” forward. Homeowners who are in forbearance aren’t paying their mortgage, and technically it’s not hitting anyone’s credit. With 6 million people in the country right now that haven’t paid a mortgage for at least 90 days, at some point those people will have to make that payment again.

Catching Up on Missed Mortgage Payments

Most people are able to put the balance onto the back of the loan and make payments to catch up. The hope is that they will be able to make those payments when the time comes.

We will see what happens! It’s definitely something to watch. These headlines are just one of many things going on related to COVID, and I’ll continue to keep you updated about the happenings in the mortgage industry.

As always, I’m happy to answer your questions or talk about mortgage options. Feel free to reach out if you need personalized info about your home loan.


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