Forbearances on the Decline At Last

Mortgage and Lending with The Federal Savings Bank/Lending in 50 states NMLS # 109616

As the economy continues to reopen and Americans slowly returning to work, the housing sector has picked up some steam. In the forbearance sector, filings continued to decline in the latest numbers Black Knight reports that there were 4.14 million homeowners in active forbearance or 7.8% of all active mortgages, as of July 7. That number is down from 8.6% in the previous week with the biggest decrease seen in GSE loans (Fannie Mae/Freddie Mac). The 4.14 million of active forbearances is the lowest number since April 28.

Mortgage credit availability declined in June from May as investors further reduced their willingness to purchase jumbo loans and those with lower credit scores. The MBA reports that its Mortgage Credit Availability Index fell 3.3% to 125. A decrease indicates that lending standards are tightening, while gains in the index are indicative of loosening credit. Lenders are navigating a gradual economic and housing market recovery that is still facing headwinds from the ongoing COVID-19 pandemic," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.

U.S. stocks are higher as the week kicks off following recent gains. The Dow and S&P registered back-to-back weekly gains when trading ended last Friday while the NASDAQ continued to hit fresh record highs with three consecutive weekly gains. The near 11% surge in the tech-heavy NASDAQ index in July has been fueled by soaring shares of Amazon, Apple, Netflix, Alphabet, which are at all-time highs. The Dow and the S&P 500 have risen 1.0% and 2.7% this month, respectively.


Forbearance filings decline. Mortgage credit availability drops. U.S. stock rally rolls on.


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