entities, Black Knight and the Mortgage Bankers Association (MBA) have been
tracking loans in forbearance plans since the start of the pandemic. They have
diverged a bit in their numbers over the last half year, but both agree, in
their most recent reports, that there are now fewer than 4 million borrowers in
in their report earlier this week, said there were 3.7 million loan in
forbearance, or 7.67 percent of all loans in servicer portfolios. On Friday Black
Knight’s report put the number of 3.9 million, or 7.4 percent of the estimated
54 million loans being serviced. About 73 percent of those loans are in extensions
of their initial 90-day plan.
Knight says the current tally is down by 71,000 from the previous week and
represents $852 billion in unpaid principal. There had been around 4.75 million
loans in forbearance plans in mid-May.
5.4 percent of all GSE-backed (Fannie Mae and Freddie Mac) loans and 11.5
percent of FHA/VA loans are currently in forbearance plans along with 7.9
percent of loans in private label securities (PLS) or banks’ portfolios. All of
those investor classes saw their numbers shrink over the past week, the largest
change was among portfolio-held/PLS loans which dropped by 36,000 loans or 0.3
percent. GSE loans in forbearance declined by 18,000 (-1 percent) and FHA/VA
loans had their second weekly decline – albeit a modest one – falling by 8,000,
also -1 percent.
activity was down in every respect this past week. There were 10 percent fewer
new forbearance requests, nearly 40 percent fewer renewals and 20 percent fewer
removals. The number of renewals has slowed since early August, but Black
Knight attributes this to the number of plans that expired at the end of July.
Those numbers should now begin to normalize.
burden of making advances of principal and interest (P&I) to investors has
largely shifted from servicers to the GSEs themselves due to the four month cap
put on the servicer obligation, there is still a requirement that someone advance
$1.7 billion per month. There was no cap put on tax and insurance (T&I)
payments so servicers have an estimated $0.7 billion monthly bill. Servicers of
FHA and VA loans must make monthly P&I payments of $1.3 billion and $0.5
billion in T&I. Servicers of other loans may have requirements of as much
as $1.7 billion and $0.6 billion, respectively.
Knight says the ongoing COVID-19 pandemic around much of the country and the expiration
of expanded unemployment benefits last month continue to represent significant
uncertainty for the weeks ahead.