According to a new report from UK-based forecasting firm Oxford Economics, 15% of homeowners will fall behind on their monthly mortgage payments in a 'tidal wave' of delinquencies.
Stimulus legislation signed by President Donald Trump allows any borrower with a federally-backed mortgage to request forbearance for up to 12 months, meaning the homeowner can skip or make reduced payments during that time.
Given the risk mortgage companies are facing right now, many lenders have imposed more stringent requirements for loan applicants. "The uncertainty in the mortgage market has contributed to a significant tightening of lending standards that may persist even once a recovery is underway," Oxford Economics wrote. -MarketWatch
An while the pace of requests for forbearance has slowed in recent weeks - however that could change. "Although the pace of forbearance requests slowed this week, call volume picked up — which could be a sign that more borrowers are calling in to check their options now that May due dates have arrived," said Mortgage Bankers Association chief economist, Mike Fratantoni.