The number
of homeowners with mortgages in COVID-19 related forbearance plans dropped during
the week ended September 1 after several weeks when there was little change.
Black Knight said its weekly survey found 147,000 fewer borrowers in plans than
the previous week, a decline of about 4 percent.
The company says last week’s
decrease means there are about 1 million fewer loans in forbearance than at the
peak in May. Seventy-five percent of those remaining are in extensions of their
original plan.

A total of 3.784
million loans remain in forbearance, 7.1 percent of the estimated 53 million
loans that are currently active.  Those
loans represent $804 billion in unpaid principal.

The decline
was spread across all loan types with the largest improvement, 75,000 loans, in
portfolio-held and private label securitized (PLS) loans.
That leaves 973,000 or
7.5 percent of those loans, in forbearance. The number of GSE mortgages fell by
49,000 to 1.425 million or 5.1 percent of those portfolios. FHA/VA loans saw a
more modest weekly decline of 23,000 to 1.386 million or 11.5 percent.

 

 

Black Knight
said forbearance starts have, thus far, shown little impact from the reduction
in expanded unemployment benefits. Through the first four weeks of August,
forbearance starts were down 13 percent from the comparable four-week period in
July. September may provide the true test, however, as impacted borrowers were
still receiving full expanded unemployment benefits up through July 31.

More than 2M
COVID-19-related forbearance plans are set to expire in September, so Black
Knight expects to see a significant volume of either extensions or removals or
both in late September and early October
, similar to what happened in late June
and early July when the first term of many plans expired. Over the last thirty
days there has been about a 50/50 split in removals and extensions, with
500,000 loans falling into each category.  

The company
says $4.6 billion in principal and interest payments must be advanced to
investors in the forborne loans each month along with $1.7 billion in tax and
insurance payments.

By Jann Swanson , dated 2020-09-04 09:22:36

Source link

Courtesy of Mortgage News Daily

Leave a Reply