Last week, President Joe Biden signed a bill ending the COVID-19 emergency declaration. However, homeowners suffering from pandemic-related financial hardships and needing assistance with their mortgage payments can still enroll in a COVID-19 forbearance plan, according to the Federal Housing Administration (FHA).
“As the national emergency may end earlier than originally expected, FHA is choosing to extend its COVID-19-related forbearance and HECM extension policies beyond the end of the national emergency,” the FHA announced. “This gives borrowers with FHA-insured mortgages who need assistance additional time to request forbearance or a HECM extension. It also provides mortgagees with additional time to offer and process these requests.”
Of the cumulative forbearance exits from June 1, 2020, through March 31, 2023, 18% represented borrowers who continued to make their monthly payments during their forbearance period, and 17.7% represented those who did not make all of their monthly payments and exited forbearance without a loss mitigation plan in place yet.
Meanwhile, 29.6% of the cumulative forbearance exits resulted in a loan deferral/partial claim, 16.1% resulted in a loan modification or trial loan modification, 10.9% resulted in reinstatements, 6.5% resulted in loans paid off through either a refinance or by selling the home, and the remaining 1.2% resulted in repayment plans, short sales, deed-in-lieus or other reasons.
The share of Fannie Mae and Freddie Mac loans in forbearance was down two basis points to 0.26%. The forbearance share for Ginnie Mae loans, portfolio loans and private-label securities decreased 10 basis points to 1.18% and 0.68%, respectively.