On Tuesday, to help homeowners who are in COVID-19 related forbearance, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac are making available a new payment deferral option. The payment deferral option allows borrowers, who are able to return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity. FHFA Director Mark Calabria said, “This new forbearance repayment solution responsibly simplifies options for homeowners while providing an additional tool for mortgage servicers. Borrowers who can pay their mortgage should, because missed payments remain an obligation that will ultimately have to be repaid.”
The unemployment line continues to grow. Nearly 37 million people are now unemployed across the nation in the past seven weeks due to the pandemic induced shutdown of the U.S. economy. For the week ended May 9, 2.981 million Americans filed for first-time unemployment benefits, worse than expectations of 2.475 million. The worst of new claims could be in the rear-view mirror and has been declining since the 6.87 million record for the week ended March 28. The four-week moving average, which irons out seasonal abnormalities came in at 3,616,500 down 564,000.
Mortgage rates remained near record lows this week as the coronavirus fears cast a cloud of uncertainty over the markets. Freddie Mac reports that the 30-year fixed-rate mortgage rose two basis points to 3.28% with 0.7 in points and fees. A year ago the rate was 4.07%. Rates should remain low for the foreseeable given the current environment.