While the mortgage forbearance provisions of the CARES Act came as good news to homeowners, the flood of applications that translate into months of missed payments has been a major concern for companies that service loans. The Federal Housing Finance Agency announced guidelines that will cap mortgage servicers' obligations to investors for loans in forbearance due to COVID-19, which is part of a larger strategy to keep the overall mortgage market functioning. The Mortgage Bankers Association (MBA) is reporting that the total number of loans in forbearance reached 5.95% as of April 12, up from 3.74% the prior week.
Rates for a 30-year fixed rate mortgage remained near all-time lows according to Freddie Mac's Primary Mortgage Market Survey (PMMS) for the week ending April 16. The PMMS notes that refinance activity remains high, but purchase loans have declined due to economic tightening.
The mortgage credit supply dropped to the lowest point in five years according to the MBA's Mortgage Credit Availability Index. MBA Associate Vice President Joel Kan said, "Lenders are making credit criteria changes to account for the increased likelihood of forbearance and defaults, as well as higher costs." Higher credit score requirements are one example of stricter standards being put in place.
Home shoppers are staying home, but they're still looking at homes. The number of 3D Home Tours created on Zillow jumped 188% month-over-month in March according to Zillow Research. During the same time, homes with virtual tours received about 50% more site visitors and were saved about 60% more frequently. Zillow's Housing Trends Report said about 25% of recent home buyers say they prefer 3D tours to in-person viewing, and 46% said they wish more listings included 3D tours.
Sources: Federal Housing Finance Administration, Mortgage Bankers Association, Freddie Mac, Zillow ResearchShare:
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