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The total number of home loans now in forbearance increased to 8.36%, according to the latest report from the Mortgage Bankers Association, and that number could be higher but many Americans aren't aware they have the option.
What it means: Fannie Mae's latest national housing survey finds that only half of mortgage holders and just a third of renters know about relief programs, including the forbearance program now available because of the CARES Act.
Details: The survey finds that just half of mortgage holders understand what forbearance is.
- One in three don’t understand what a loan modification entails.
- More than 60% of homeowners with a mortgage were unaware of any mortgage payment deferral offer from their lender.
Why it matters: The increase of borrowers in forbearance has slowed rapidly in recent weeks, but could pick up steam again once more borrowers learn about the programs.
- That could provide an additional boost to the economy, but could also spell trouble for mortgage servicers and the mortgage-backed securities market.
The big picture: The current level of borrowers taking advantage of the forbearance program means that American consumers have $7.9 billion a month available to spend that otherwise might be going to a monthly mortgage payment, according to an analysis by Cowen Research Group.
Go deeper: Coronavirus is squeezing more people out of the housing market