More than 6 percent of US mortgages in forbearance: analysis

More than 6 percent of U.S. mortgages are in forbearance as Americans struggle to keep up with home loan payments amid the coronavirus pandemic, according to projections released Friday by financial data firm Black Knight.

Black Knight estimates that 6.4 percent of all U.S. mortgages, roughly 3.4 million home loans, have been granted payment delays by banks and lenders as millions of Americans face daunting financial futures because of COVID-19.

More than 26 million Americans have applied for unemployment benefits since mid March as businesses across the U.S. are forced to close in a bid to slow the spread of COVID-19.

Several banks and lenders have agreed to delay mortgage payments for struggling borrowers, and the $2.2 trillion relief bill signed by President Trump last month gave all homeowners with a federally guaranteed mortgage up to 180 days of forbearance.

The federal government backstops roughly $7 billion in mortgages through Fannie Mae and Freddie Mac, which purchases and repackages some home loans into bonds, along with the Department of Veterans Affairs (VA) and Federal Housing Administration (FHA).

More than 1.5 million mortgages backed by Fannie and Freddie are in forbearance, Black Knight projected, or roughly 5.6 percent of their total guaranteed home loans. Slightly more than 1 million VA/FHA-backed mortgages, or 8.9 percent, are in forbearance, according to Black Knight’s estimates.

While forbearance could be crucial aid for millions of Americans who’ve lost their jobs or income due to the pandemic, some are facing the prospect of owing months of missed payments at once. 

Mortgage servicers and lenders that exclusively offer home loans are also pleading with regulators for financial support as they struggle to fund payments owed to mortgage bondholders.