Morning Report: Over 70% of borrowers in forbearance don’t need the help

Vital Statistics:


Last Change
S&P futures 2966 37.1
Oil (WTI) 32.84 1.19
10 year government bond yield 0.71%
30 year fixed rate mortgage 3.28%


Stocks are higher this morning as retailer earnings are coming in better than expected. Bonds and MBS are flat.


The FHFA put out new guidance yesterday on forbearance and refinances. Essentially, you will will be eligible to refinance your property provided you are current with whatever repayment plan you negotiated for 3 months after exiting forbearance. “Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said Director Mark Calabria. “Today’s action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.” According to the MBA, 4.1 million borrowers are in forbearance right now and over 70% don’t need the help. That is a huge number, but i guess it is to be expected since there is no requirement to demonstrate hardship.


Mortgage Applications fell 2.6% last week as purchases increased 6% and refis fell 6%. “Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Purchase activity – which was 35 percent below year-ago levels six weeks ago – increased across all loan types and was only 1.5 percent lower than last year. Government purchase applications, which include FHA, VA and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months. As states gradually reopen and both home buyer and seller activity increases, we will be closely watching to see if these positive trends continue, or if they reflect shorter-term, pent-up demand.”


41% of home sales had bidding wars, according to Redfin. “Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a lack of supply is a recipe for bidding wars,” said Redfin lead economist Taylor Marr. “Homebuyers are getting back out there, searching for more space as they realize using their home as an office and school may become the norm. But sellers are still holding off on listing their homes, partially due to economic uncertainty and concerns of health risks. In some hot neighborhoods, there may only be one or two homes for sale, with multiple homebuyers vying for them.”


22% of builders reduced home prices to move inventory, according to the NAHB. This is much less than the housing recession of 2008, which was about 50%.

11 Responses

  1. Believe All Women*

    *terms and conditions apply


  2. NYT Op-Ed page never lets a crisis go to waste:

    “The End of Meat Is Here

    If you care about the working poor, about racial justice, and about climate change, you have to stop eating animals.

    Jonathan Safran Foer”


    • i’m 0-3!


    • Fortunately, I don’t care about anything of those things. Neither do they–at all, they are positions to be worn as badges and almost purely the products of narcissism–but I don’t even care about pretending.


    • It’s amusing because it’s the exact opposite of how to build a coalition.

      Impose purity tests on unrelated issues.


      • And so it often comes down to how successful you can be in electoral politics–or securing power by other means–without building coalitions.

        I kind of think it collapses at some point, and certainly would point to how no party is going to enjoy 40 year rule of the house, ever again. I think more and more you’ll have the house and senate switching back and forth, and probably state governments. At some point I wonder if the utter lack of coalitions and purity testing will put perma-blue states in play. Nothing alienates even the faithful like failing a few new purity tests.


    • Some of the most thoughtful people I know find ways not to give the problems of animal agriculture any thought, just as I find ways to avoid thinking about climate change and income inequality, not to mention the paradoxes in my own eating life.

      For some reason, i have absolutely zero problems not thinking about animal agriculture, climate change or income inequality.


      • Me neither. Nor do I give thought to eating bugs. biofuel or random blackholes drifting through our solar system.


      • And based on his own headline, the author has already forgotten about racial justice since he didn’t include it in the list.

        He should check his privilege.


      • i have to say, racial justice doesn’t immediately spring to mind when i am grilling a ribeye on the Weber Kettle


      • Animal agriculture is a problem for people in that business, not the general public, and perhaps anyone tasked with regulation of said business. I’m not one of those.

        Climate change and income inequality aren’t real problems, so nobody should give any thought to them. It’s like saying weather is a real problem or height inequality is a real problem. These are statements of things that exist recharacterized as problems.

        Actual problems might be: rising prices and stagnant wages. Or pollution levels from industrial factories.

        But actual problems are things operating at a normal scale that individuals would have to do something actual about and then measure results. Huge macro-problems like climate change and “income inequality” are literally things about which nothing can be done and there are no measurements that will ever show progress–or if a measurement shows progress, it’s easy to change to something else. Or massage the numbers. So that the problem can never be solved, and none of the people complaining about it have to do anything real–or see themselves as failing.


Be kind, show respect, and all will be right with the world.

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