Marketpulse: Forbearances See Very Slight Improvement
Black Knight concludes that after holding flat last week, the total number of mortgages in active forbearance improved slightly. Forbearances ticked down by just 1,000 over the past week, making the second consecutive week of basically zero net improvement.
This is not unexpected, notes Black Knight, as improvement has slowed toward the end of each of the past several months. It has generally followed a stair-step progression with the most improvement seen at the beginning of the month and slowing as we move toward the end.
According to Black Knight’s McDash Flash Forbearance Tracker, as of August 25, 3.9 million homeowners remain in active forbearance, representing 7.4% of all active mortgages. This is unchanged from last week (or the week prior). Together, they represent $828 billion in unpaid principal. Of these, 72% have had their terms extended.
A 23,000 reduction among GSE mortgages was almost entirely offset by a 10,000 raise in FHA forbearances and a 12,000 increase among portfolio/PLS held loans. Some 5.3% of all GSE-backed loans and 11.6% of all FHA/VA loans are currently in forbearance plans. Another 8.1% of loans in private label securities or banks’ portfolios are also in forbearance.
Over the past 30 days, active forbearances have declined by 171,000 (-4%), with the strongest improvement again among GSE loans (-128,000, -8%). More modest improvements have been seen among both FHA/VA forbearances (-23,000, -2%) and private/portfolio loans (-20,000, -2%).
According to Black Knight, there are a number of factors that continue to represent significant uncertainty as we move forward, including the ongoing COVID-19 pandemic and the expiration of expanded unemployment benefits last month.
The Place for Lending Visionaries and Thought Leaders. We take you beyond the latest news and trends to help you grow your lending business.
