With 26.5 million Americans filing for unemployment over the past month, homeowners are seeking mortgage servicer’s relief. The forbearance plan allows homeowners that have been affected by the COVID-19 economic crisis with federally backed loans to pause, delay, or reduce their mortgage payment.

A survey from the Mortgage Bankers Association (MBA) reported that nearly 3.5 million mortgage borrowers have reduced or paused their payments as the coronavirus outbreak in the United States continues to bring sizeable spikes in unemployment. The share of mortgage loans in forbearance jumped from 5.95% in the prior week to 6.99% as of April 19, 2020.

Mortgages backed by Ginnie Mae showed the largest growth from the prior week, up 1.47%. In addition, they had the highest percentage of loans in forbearance by investor type at 9.37% of loans. For FHA and VA borrowers, the share of loans in forbearance stood at roughly 10%.

MBA has called upon the U.S. government to provide relief on the mortgage industry. The Federal Reserve commented that they are continuing to monitor the situation and could step in should the situation worsen.

MBA’s Senior Vice President and Chief Economist Michael Fratantoni expects forbearance requests to pick up again, with May payment dates quickly approaching.

AIS will continue to provide updates as we monitor mortgage default and forbearance activity and its potential financial impact on the mortgage servicing industry.