Housing Finance at a Glance: Monthly Chartbooks

The July 2021 edition of At A Glance,  HFPC’s reference guide for mortgage and housing market data, includes updated figures describing first lien origination volume, the share of loans in serious delinquency or foreclosure, spreads on GSE risk transfer securities, and a special feature on loan-level GSE credit data.

 

The GSE COVID-19 Payment Deferral Program Has Helped More Than 300,000 Homeowners

The Administration recently extended the mortgage forbearance period for federally-backed mortgages. Borrowers who entered forbearance prior to June 30, 2020 may now be in forbearance for up to 15 months, and new borrowers can enter forbearance as late as June 30, 2021. These actions were designed to help borrowers maintain homeownership by giving them more time to recover financially from pandemic-related disruptions.

As borrowers exit forbearance, they need to determine, with their mortgage servicer, how to repay the forborne amount. The GSEs have created a loss mitigation waterfall with a first step of repaying the forborne amount in a lump sum or over a short period. If this is untenable, a borrower can revert to their original payment and move the forborne amount to the end of the mortgage with the mortgage term extended by the number of missed payments. This is, by far, the most popular exit option, and Fannie Mae and Freddie Mac refer to it as the COVID-19 Deferral Program.  A mortgage modification will be considered for borrowers who cannot make their old payment, which would further reduce their payment.

Since reaching a peak of 6.4 percent in May 2020, the GSE forbearance rate has fallen to 3.0 percent in February 2021 (see page 24 of this chartbook). About two-thirds of the GSE loans that have been in forbearance have exited the program. Very few of those that have exited are still delinquent or in loss mitigation. A larger share of those that have exited forbearance prepaid their mortgage (14 percent of GSE loans ever in forbearance). The majority of those that have exited forbearance are current, accounting for 47 percent of all GSE loans ever in forbearance, with most of these, or 320,856 borrowers, enrolled in the COVID-19 Payment Deferral program as of January 2021; this accounts for 1.4 percent of all GSE loans.

Although borrowers with the highest score account for half of the COVID-19 Payment Deferral program’s participants, the program has disproportionately helped homeowners with lower FICO scores. The typical deferred amount while in forbearance is small, $6,000, accounting for 2.1 percent of the implied home value at origination. This percentage likely represents an upper bound since the value of most homes has increased since closing.

Across FICO score categories, the median deferred amount among borrowers with the lowest scores, was similar to those with higher scores. After adjusting for implied home values at origination, the median deferred amount for program participants with the lowest FICO scores is modestly above those with higher scores. However, at 2.8 percent, it is well below the pace of house price growth (see page 22 of this chartbook).

The early evidence suggests that the typical deferred amount should not significantly impact the housing equity accumulated by homeowners in the deferral program. However, with the unemployment rate stagnating, and those who are not back on their feet choosing to extend, it is likely that future entrants into the program may have larger amounts of deferred payments relative to the borrowers currently in the program. We will continue to closely track these borrowers, as they may be less likely to take advantage of the COVID-19 Deferral Program, and more likely to require a modification to retain their home.


Past chartbooks:

July 29th Chartbook Call featuring Amy Crews Cutts; Chartbook Slides
June 2021
May 2021
April 29th Chartbook Call featuring Dave Stevens; Chartbook Slides
April 2021
March 2021
February 2021
January 28th Chartbook Call featuring Ed Golding; Chartbook Slides
December 2020
November 2020
October 29th chartbook call featuring speaker Ed Golding.
Octobert 2020 
September 2020
August 2020
July 2020
July 29 Chartbook call featuring Amy Crews Cutts; Slides from Amy Crews Cutts and Chartbook Slides
June 2020
May 2020
April 2020
March 2020
February 2020
January 29th Chartbook call featuring Bob Broeksmit and Mike Fratantoni.
January 2020

December 2019
November 2019
October 2019
September 2019
August 2019
July 2019 (watch the July 29 chartbook call with guest Richard Green)
June 2019
May 2019
April 2019 (watch the April 29 chartbook call with guest Dave Stevens)
March 2019
February 2019
January 2019 (watch the January 30 chartbook call with guest Dave Stevens)

December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018 
March 2018
February 2018
January 2018

December 2017
November 2017
October 2017
September 2017 
August 2017
July 2017
June 2017
May 2017
April 2017 
March 2017
February 2017
January 2017

December 2016
November 2016
October 2016
September 2016
August 2016 
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016 


December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015

December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014

December 2013
November 2013
October 2013

 

 

 

 

We provided valuable evidence on emerging issues, including:

We are looking ahead to 2021, when we will continue to analyze ongoing issues critical to the health of the housing market, and respond quickly to emerging trends. Among other things, expect to see work from us on these topics in 2021:

  • The continued impact of the pandemic on the housing market;
  • Reducing the racial wealth gap through affordable housing and homeownership;
  • Barriers to homeownership in particular communities; and
  • The ongoing housing finance reform debate.

Please continue to use and share our work. Thank you for your support!