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2.9M Homeowners in Forbearance Plans

Black Knight, Inc. has begun tracking loan-level forbearance data on a daily basis through its newly introduced McDash Flash data set. As Black Knight notes, level of detail is essential for both mortgage market participants and government entities in addressing the ramifications of this crisis.

According to the report, as of April 16, more than 2.9 million homeowners, or 5.5% of all mortgages, have entered into COVID-19 mortgage forbearance plans. This population represents $651 billion in unpaid principal and includes 4.9% of all GSE-backed loans and 7.6% of FHA/VA loans.

A new survey by the Mortgage Bankers Association (MBA) found that the number of home loans in forbearance rose from 2.73% to 3.74% during the week of March 30 to April 5.

Mortgages backed by Ginnie Mae had the largest weekly growth of 1.58% and the highest overall share in forbearance requests (5.89%).

"The nationwide shutdown of the economy to slow the spread of COVID-19 continues to create hardships for millions of households, and more are contacting their servicers for relief in accordance with the forbearance provisions under the CARES Act," said Mike Fratantoni, MBA's SVP and Chief Economist. "The share of loans in forbearance grew the first week of April, and forbearance requests and call center volume further increased. With mitigation efforts seemingly in place for at least several more weeks, job losses will continue and the number of borrowers asking for forbearance will likely continue to rise at a rapid pace."

Black Knight notes that mortgage servicers would be bound to advance $2.3 billion of principal and interest payments per month to holders of government-backed mortgage securities on COVID-19-related forbearances. Another $1.1 billion per month in lost funds will be faced by those with portfolio-held or privately securitized mortgages.

“In these times, it is essential to both our industry and for the benefit of the entire U.S. economy to have a clear understanding of the magnitude of the mortgage forbearance situation,” said Black Knight CEO Anthony Jabbour. “Leveraging Black Knight’s extensive data, research and analytics capabilities, we are able to provide that clarity.  Black Knight has the data and analytics necessary for lenders and servicers to benchmark their company’s activities against the industry and use this information to make informed decisions regarding next steps.”

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.
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