The number of homeowners in active
forbearance plans fell again this past week. Black Knight estimates there are
now 4.6 million people remaining in the plans which mortgage servicers are
required to provide as part of the CARES Act package of COVID-19 economic
relief. Those plans allow homeowners who claim a financial impact from the
pandemic to temporarily skip or make partial mortgage payments.
The June 16 count represents 8.7
percent of all active mortgages, down by 57,000 and 0.1 percentage point from
the previous week. It is 158,000 fewer plans than at the peak during the week
of May 22.
The current plans represent just
over $1 trillion in unpaid principal ($1,012 billion). Some 6.8 percent of all
GSE-backed loans and 12.1 percent of all FHA/VA loans are currently in plans.
While the number of government-backed
loans in plans are declining, GSE loans fell by 51,000 and VA/FHA loans by
11,000, those serviced for others continue to grow. There was an increase of
6,000 last week in portfolios serviced for portfolio lenders, private label
securities, and other non-agency investors.
Servicers of government-backed loans
are required to advance principal and interest (P&I) payments to investors
even when borrowers are not paying mortgages and must also cover taxes and
insurance (T&I) premiums. Black Knight estimates that, even with the
reduced number of plans, servicers still need to advance a combined $3.4 billion per month in P&I payments to
holders of government-backed securities for the forborne loans and another $1.4
billion in T&I payments. Servicers of “other” loans may be obligated for up
to $2.1 billion in P&I and $700 million in T&I advances.
The Federal Housing Finance Agency
has capped P&I advances from servicers of GSE loans at four months, but
that still leaves their obligations over that period at $8.4 billion. T&I
payments are not capped.