Black Knight’s weekly report on the numbers of
mortgage loans in COVID-19 forbearance plans shows that a decline in those
numbers of nearly a half million last week. More than 435,000 homeowners exited
the plans, the largest drop yet.
As of July 7, 4.14 million homeowners were in the
plans which allow them to skip or reduce their mortgage payments if they are
suffering financial problems due to the pandemic. This represents 7.8 percent of
mortgage lenders and just under $900 billion in unpaid principal. This is the
smallest number of plans since April 28.
percent of all GSE-backed loans, 1,678,000 in number,
and 11.6 percent of all FHA/VA loans (1,399,000)
are currently in forbearance plans. Another 1,067,000
or 8.2 percent of loans in private label securities or banks’ portfolios
are included in the total.
serviced for the two GSEs had the largest decline in plans, 200,0000, an 11
percent reduction in a single week. Loans serviced for others also saw an 11
percent decline, a decrease of 136,000 loans. The FHA/VA forbearances dropped
by 93,000, a 6.0 percent downturn.
economist and director of market research for Black Knight, provided some
context. “This latest decline in the number of homeowners in active
forbearance is an encouraging sign of continued improvement. The reduction of
roughly 435,000 – the largest single-week drop yet – was driven at least in
part by the fact that more than half of all active forbearance plans entering
the month were set to expire at the end of June. While the majority of those
have been extended, this week’s data suggests a significant share were
the lower numbers, servicers of government backed loans are still obligated to
make significant advances of principal and interest (P&I) to investors in
mortgage-backed securities as well as payments of property taxes and insurance
premiums (T&I). Black Knight estimates that servicers of GSE-backed loans
have monthly obligations of $1.9 billion for P&I and $700 million for
T&I. FHA/VA servicers must make advances of $1.3 billion and $500 million
respectively. Servicers of other loans could have $1.8 billion and $600,000
million in advance obligations.