According to the McDash Flash Forbearance Tracker from Black Knight, as of April 23, 2020, more than 3.4 million homeowners, or 6.4% of all mortgages, have entered into COVID-19 mortgage forbearance plans.
This population represents $754 billion in unpaid principal and includes 5.6% of all GSE-backed loans and 8.9% of all FHA/VA loans
This is an increase from Black Knights April 16 data, when more than 2.9 million homeowners, or 5.5% of all mortgages, have entered into COVID-19 mortgage forbearance plans.
According to Black Knight CEO Anthony Jabbour, the recent Federal Housing Finance Agency (FHFA) announcement of a four-month limit on advance obligations for servicers of mortgages backed by Fannie Mae and Freddie Mac provides the industry with some much-needed clarity.
“Having a four-month end date on the period in which servicers need to advance principal and interest payments on behalf of homeowners in forbearance is extremely helpful to our servicing clients,” said Jabbour. “Still, even knowing that time limit, with today’s number of forbearance plans, servicers are still looking at more than $7 billion dollars in advances over those four months. And the forbearance numbers are climbing steadily, day by day. Clearly, this remains a challenging situation all around.”
With dramatic increases in unemployment, delinquencies and defaults can be expected to increase for the foreseeable future, even during forbearance, Black Knight notes.
“From the start of the COVID-19 crisis, Black Knight has sought to provide leadership on behalf of our clients, as well as provide them with clarity, actionable intelligence and knowledgeable assistance,” Jabbour added. “Beyond that, no other company has the sort of holistic view of the mortgage market and related industries that Black Knight has. We’ve been able to see – and quantify – what this situation means for our clients, the industry and the wider U.S. economy, and we have been actively sharing and innovating around that insight.”
In response to increased forbearances and increased economic hardships nationwide, Nevada joined a coalition of 35 states in recommending the U.S. government take several steps to address the mortgage market.
"COVID-19 will present unprecedented challenges to homeowners and the mortgage servicing industry, and protecting Nevadans’ most import asset—their homes—is of critical importance," Attorney General Aaron Ford said in a statement. "These recommendations will help millions of American homeowners avoid delinquency and limit the potentially disastrous strain on the mortgage servicing industry, especially here in Nevada."