April 7 (UPI) -- The Mortgage Bankers Association said Tuesday mortgage forbearance requests surged amid signing of a coronavirus relief bill last month, allowing many people to delay at least 90 days of monthly payments.
From March 2 to April 1, total forbearance loans grew to 2.66 percent, up from 0.25 percent, according the MBA's Forbearance and Call Volume Survey findings released Tuesday.
Ginnie Mae-backed mortgages, which focus on expanding affordable housing through loans such as Federal Housing Administration and Veterans Affairs loans, saw the biggest jump in loans in forbearance, up to 4.25 percent from 0.19 percent.
Independent Mortgage Bank servicers, which focus on FHA and VA loans and serve low- to moderate-income borrowers, comprised 3.45 percent of loans in forbearance.
From March 2 to March 16, requests to delay payments surged by 1,270 percent, and from March 16 to March 30, they surged another 1,896 percent, according to the MBA.
Call center hold times also increased to about 18 minutes from just under 2 minutes about three weeks earlier with 25 percent of callers hanging up the calls from 5 percent before the surge, the MBA said.
President Donald Trump signed into law the $2 trillion CARES Act on March 27 to support Americans and the U.S. economy amid the fallout from the coronavirus pandemic. The bill allows borrowers with federally backed mortgages, which make up about 62 percent of all first lien mortgages, according to the Urban Institute, to delay at least 90 days of monthly payments and potentially up to a year's worth. The payments still need to be remitted by the end of the loan term or through a modification plan.
April's mortgage forbearance requests surged even though mortgage payments due on the first of each month are usually without penalty until the 15th due to grace periods.
"MBA's survey highlights the immediate relief consumers are seeking as they navigate the economic hardships brought forth by the mitigation efforts to stop the spread of COVID-19," Mike Fratantoni, MBA's senior vice president and chief economist, said in the statement. "The mortgage industry is committed to providing this much-needed forbearance as mandated by law under the CARES Act. It is expected that requests will continue to skyrocket at an unsustainable pace in the coming weeks, putting insurmountable cash flow constraints on many servicers -- especially IMBs."
The survey findings came from 22.4 million loans serviced as of April 1, representing about 25 percent of the first lien mortgage servicing market.