Mortgage Forbearance Balloons, Home Sales Plunge

by Wolf Richter
Wolf Street

In addition to logistical difficulties of selling a home in the era of social distancing, there is the explosion of a historic unemployment crisis.

By the end of April, there will be 4.2 million mortgages in forbearance, or 7.6% of all mortgages, the American Enterprise Institute estimated in a note, based on forbearance data through April 19 released by the Mortgage Bankers Association yesterday.

These homeowners whose mortgages are in forbearance will not make any mortgage payments for some months, as spelled out in the forbearance agreement they have entered into with their mortgage lenders or servicers. The missed mortgage payments will be added to the remainder of the mortgage, so it’s not free.

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