By Amilda | May 26, 2020 | NEXT
As of May 19, 2020, 4.75 million homeowners, or 9% of all active mortgages had entered into COVID-19 mortgage forbearance plan, and nearly half of them made mortgage payments in April, according to the McDas
h Flash Forbearance Tracker report by Black Knight, Inc.
These mortgages account for a little over $1 trillion in unpaid principal, the report notes, of which an estimated 7.1% of all Fannie Mae and Freddie Mac backed loans and 12.6% are FHA/VA mortgages currently in forbearance.
By the end of April, 4.25 million homeowners were in active forbearance but 46% of them still made their April mortgage payment, while 54% did not, said Black Knight CEO Anthony Jabbour.
Over the second week of May, active forbearance volumes increased by just 93,000 marking a decline of more than 70% from 325,000 in the first week of May, and 93% from the first week of April, when the number of active forbearance plans increased by nearly 1.4 million in a single week.
This slowdown suggests that volumes “may be beginning to flatten, warranting a shift in servicer focus from forbearance pipeline growth,” said Jabbour, “to managing not only the forbearance period, but the millions of loan workouts and modifications” that are bound to follow.
As of May 19, 2020 however, just 21% of borrowers in forbearance had made their May payments. Which means, the approximately, 1.4 million homeowners in forbearance who had made April payments currently are at risk of becoming past due in May.
If that happens, there will be a sharp increase in the national delinquency rate, according to the report, which tracks loan-level forbearance and performance data daily, to monitor the impact of the pandemic on the U.S. mortgage market.
“Shifting to the management of such a large pipeline of homeowners in forbearance plans,” added Jabbour, will mark the beginning of an entirely new challenge for mortgage servicers.