A study from the Mortgage Bankers Association has found some good and bad news about mortgages. Let’s dig into the details.
The report found that about 3.5 million homeowners are currently in mortgage forbearance plans, which allow people to pause payments. The percentage of people in these plans, however, continues to decline it is now at just 6.9 percent. The big drop is mostly thanks to loans issued by Fannie Mae and Freddie Mac. As Marketwatch reports, the percentage of their loans in forbearance has plummeted to just 4.55 percent.
The decline of mortgages in forbearance indicates that people are recovering from the financial fallout of the pandemic. The more people that are able to find solid financial ground, the better. Not only is it good for people on an individual scale, it’s good for the economy overall.
The Mortgage Bankers Association’s report had some not so great news in it as well. It found that while the percentage of homeowners in forbearance has dropped overall, the number of homeowners in forbearance with Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) loans has increased. The percentage of people in forbearance for these loans, which are backed by Ginnie Mae, is up from 9.12 percent to 9.15 percent.
Ginnie Mae loans are more common for first time buyers and borrowers with low income and low credit scores. In other words, for people who are already struggling, the picture isn’t quite as rosy. This indicates that despite some good news for a few, the pandemic is still wreaking havoc on many. The road to recovery, unfortunately, is a long one.