Due to the deluge of requests, the number of loans in forbearance went from 0.25% of all mortgages to 2.66% from March 2 to April 1, according to MBA. That's likely because the federal government stepped in to help struggling homeowners who may have lost income or jobs in this crisis.
"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," MBA's chief economist, Mike Fratantoni, said in a statement. "It is expected that requests will continue to skyrocket at an unsustainable pace in the coming weeks."
Last month, the Federal Housing Finance Agency allowed homeowners suffering from financial hardship due to COVID-19 to receive up to 12 months of forbearance on their mortgages. Homeowners won't have their late payments reported to credit bureaus, which could lower their scores, or be charged late fees. The help was only for those with single-family homes backed by FHA, Fannie Mae, Freddie Mac, U.S. Department of Agriculture, and U.S. Department of Veterans Affairs loans.
Many other lenders who have issued or are servicing non-Fannie and non-Freddie loans are following suit.
In addition, hold time on calls with mortgage servicers went from under 2 minutes to 17.5 minutes, according to MBA. People on Twitter have complained of having to wait much longer, even up to five hours. One tweeted about getting a hold message estimating a nearly 44-hour wait time to speak with a Chase representative.
"Homeowners who are having difficulty making mortgage payments should reach out to their lenders to work on a plan," says realtor.com Chief Economist Danielle Hale. "You may have to wait for a while before getting your lender on the phone, but be persistent."
Moody's Zandi anticipates that about 15 million homeowners will receive mortgage forbearance as this crisis drags on. That's about 30% of all residential, single-family mortgages.
If additional government action isn't taken and homeowners continue struggling to pay their bills, Zandi worries there could be a surge in foreclosures in the future.
"There will be a lot of credit problems down the road, delinquencies, defaults, and foreclosures," says Zandi.
