The number of forbearance requests to mortgage lenders rose 1,896% between the week of March 16 and the week of March 30, according to the Mortgage Bankers Association (MBA).
That follows a jump of 1,270% between March 2 and March 16.
The CARES Act, signed into law on March 27 to help limit the economic damage from COVID-19, allows borrowers with government-backed mortgages to delay payments with no documentation of hardship necessary.
The MBA said the number of calls to servicers requesting forbearances was 218,718 for the week ended March 29 and that figure jumped to 717,577 the next week. The group said the proportion of loans in forbearance grew from 0.25% to 2.66% among those it sampled from March 2 to April 1.
The mortgage delinquency rate was near a record low at the end of 2019, according to CoreLogic.
On Saturday, a coalition including the Mortgage Bankers Association, the National Association of Home Builders, the National Association of Realtors, the Independent Community Bankers of America, U.S. Mortgage Insurers, and the National Apartment Association said the government should help servicers meet their obligations to bondholders.
“The scale of this forbearance program could not have been foreseen by mortgage servicers, or fully anticipated by regulators,” the group said. “[I]t is therefore incumbent upon the government to provide a liquidity facility for single-family and multifamily servicers … any further delay could lead to greater uncertainty and volatility in the market.”
Government-backed mortgages make up about 62% of all first lien mortgages, according to the Urban Institute.
Jay Bray, the chief executive officer of nonbank servicer Mr. Cooper, said an agreement to provide liquidity to services never made it into the final CARES Act.
“It’s frankly frustrating and ridiculous that we do not have a solution in place,” Bray said in an interview. “There is going to be complete chaos. We’re the largest nonbank. We have a strong balance sheet, but for the industry as a whole you’re going to start seeing problems soon.”
Bray said Mr. Cooper has already granted more than 80,000 forbearances.