mortgage

Coronavirus mortgage bailouts fall below 3 million in pandemic’s sharpest decline

  • The number of mortgages in active pandemic-related bailouts plunged as the first wave of forbearance plans hit the end of their six-month term.
  • Over the past week, active forbearances dropped by 649,000, or 18%, according to Black Knight, a mortgage technology and data analytics firm.
  • That brings the total number of plans below 3 million for the first time since April.
  • As of Oct. 6, 2.97 million homeowners remain in pandemic-related forbearance plans, or 5.6% of all active mortgages, down from 6.8% the previous week.



a large brick building with grass in front of a house: Prospective home buyers arrive with a realtor to a house for sale in Dunlap, Illinois.


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Prospective home buyers arrive with a realtor to a house for sale in Dunlap, Illinois.

The number of mortgages in active pandemic-related bailouts plunged in the past week as the first wave of forbearance plans hit the end of their six-month term.

It was the largest decline since the crisis began.

Over the past week, active forbearances dropped by 649,000, or 18%, according to Black Knight, a mortgage technology and data analytics firm. That brings the total number of plans, both government and private sector, below 3 million for the first time since April. In addition, the decline was noticeably larger than the drop of 435,000 when the first wave of forbearances hit the three-month mark in early July.

As of Oct. 6, 2.97 million homeowners remain in pandemic-related forbearance plans, or 5.6% of all active mortgages, down from 6.8% the previous week. The loans represent collectively $614 billion in unpaid principal.

Video: Mortgage rates hit new low as homeowners move to refinance (CNBC)

Mortgage rates hit new low as homeowners move to refinance

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These plans allow borrowers to delay their monthly payments for at least 30 days and up to one year. The plans are generally administered in three-month blocks, with the option to renew

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Australia should brace for a wave of business failures and growing mortgage stress, the RBA warns, as support measures fall away


Australia’s central bank expects the number of small business failures will “rise substantially” as income and loan pressure builds.

With income support measures and more than $200 billion in loan deferrals set to expire, the Reserve Bank of Australia (RBA) says between 10% and 15% of businesses in hard-hit sectors won’t make it as they run out of cash.

“These businesses are in a tenuous position and are particularly vulnerable to a further deterioration in trading conditions or the removal of support measures,” the RBA wrote in its Financial Stability Review published on Friday.

“Survey evidence indicates that about one-quarter of small businesses currently receiving income support would close if the support measures were removed now, before an improvement in trading conditions.”

While the RBA acknowledged there was “a high degree of uncertainty about the magnitude and timing” of those failures, the prognosis doesn’t look good.

For one, the number of business insolvencies has been suppressed since March as the government allowed owners to continue operating despite mounting debts.

While helpful at the time, various groups have warned that all that may do is create a business blowout further down the line, that will have even larger ramifications as owners scramble to settle with their creditors.

So too will $200 billion in loan deferrals need to be dealt with by January. It’s telling that even with that option, the RBA notes that commercial vacancies are rising and especially for retail businesses.

“Retail vacancies rose sharply over the first half of 2020. The biggest increase has been in central business districts (CBDs), where vacancy rates have risen to over 10%,” the RBA wrote.

“Further increases in vacancy rates are likely and department stores have accelerated planned closures.”

All of this will have greater consequences for Australian workers, who face the growing

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Mortgage rates set another record low, sparking new strength in refinances

  • Refinance volume surged to the highest level since mid-August as mortgage rates dipped to 3.01%.
  • Refinances jumped 8% last week and were 50% higher than a year ago, according to the Mortgage Bankers Association.



a stop sign: An 'Open House' sign is displayed as potential home buyers arrive at a property for sale in Columbus, Ohio.


© Provided by CNBC
An ‘Open House’ sign is displayed as potential home buyers arrive at a property for sale in Columbus, Ohio.

Mortgage rates moved even lower last week after setting multiple record lows in recent months, spurring more borrowers to call their lenders and apply for a refinance, but homebuyers were quite as motivated. 

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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 slipped to 3.01% from 3.05%, while points decreased to 0.37 from 0.52 for loans with a 20% down payment. 

In response, refinance application volume, which is most sensitive to weekly rate moves, rose 8% for the week and was 50% higher than a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. That is the highest refinance volume since mid-August.

Applications for a mortgage to purchase a home fell 2% for the week but were 21% higher than a year ago. While the annual comparison is strong, purchase volume has been falling little by little and is now down just over 4% from four weeks ago.

“There are signs that demand is waning at the entry-level portion of the market because of supply and affordability hurdles, as well as the adverse economic impact the pandemic is having on hourly workers and low- and moderate-income households,” said Joel Kan, an MBA economist. “As a result, the lower price tiers are seeing slower growth, which is contributing to the rising trend in average loan balances.”  

The average loan size increased again, to a record $371,500, thanks to stronger activity on the

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How to check ‘refinance your mortgage’ off your list this weekend

How to check 'refinance your mortgage' off your list this weekend
How to check ‘refinance your mortgage’ off your list this weekend

Instead of spending another weekend quarantining in front of Netflix or reuniting on Zoom with classmates or former co-workers you barely remember, why not do something really valuable?

Mortgage rates in 2020 have never been lower: The average for a 30-year fixed-rate mortgage dropped below 3% for the first time, and some lenders are offering loans at 2.50% and even lower.

So this weekend, why not start the ball rolling on a mortgage refinance that will cut your housing costs?

Chances are, it’s time for you to refi. The data firm Black Knight recently said 19.3 million mortgage holders are ripe for a refinance and could save an average $299 per month. Close to 2.5 million could save $500 a month or more.

Sure, with a refinance there are forms to fill out, tax returns and other documents you’ll need to pull together, closing costs to be paid. But the sooner you get started, the better. Here are four steps to begin the process this weekend.

1. Be certain a refi is the right move

<cite>fizkes / Shutterstock</cite>
fizkes / Shutterstock

Today’s cellar-dwelling mortgage rates may look very appealing, but the terms of your existing mortgage could make refinancing a bad call.

Some mortgages carry a penalty for early repayment, especially during the first few years of the loan. You also could run into legal complications if you took advantage of a local government grant program, like one for first-time homebuyers.

Before you start down the path toward a refinance, read over your loan documents carefully to make sure you won’t get dinged with exorbitant fees.

Consider several other criteria to determine whether a refi is right for you.

According to Black Knight, you’re in a good position to land a

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Mortgage rate forecast Q4: Will the low rates continue? | Money

However, Ken H. Johnson, a housing economist at Florida Atlantic University, is less optimistic about a quick economic recovery. “Rates will remain low for at least another year,” he says. “I just do not see full or near-full economic recovery until COVID-19 no longer or minimally impacts the economy.”

— Economic recovery could boost rates

Greg McBride, CFA, Bankrate’s chief financial analyst, sees rates holding steady in the coming year. “Mortgage rates will remain at historically low levels and in no way be an impediment to well-qualified borrowers, but they won’t be quite as low as what was seen in the summer of 2020,” he says. “A refinance fee taking effect in Q4 2020 and further economic improvement will push rates a bit higher.”

Audrey Boissonou of Guarantee Mortgage in Walnut Creek, California, says the direction of the economy will prove crucial. “I’m locking people in in the high 2s right now,” she says. “I am seeing nothing that makes me think rates will go up. Of course, it all depends on what happens in the next few months. It can all change on a dime.”

Predicting rates is always a challenge, as Boissonou notes. But if the Fed’s attitude is any indication, then rates could remain low over the next year.

The Fed has set a pattern of keeping long rates low in challenging times, says William Emmons, the lead economist at the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis. “The demonstrated willingness of the Fed is to do the old cliche of ‘whatever it takes,'” says Emmons, who adds that he doesn’t state the Fed’s official position. “That’s pretty widespread, the belief that the Fed will do whatever it takes.”

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