Black Knight’s Director of Market Research told CNBC in an interview that rising forbearances may continue.
“We’re not out of the woods yet in terms of the coronavirus impact on the mortgage and housing market,” said Andy Walden, Director of Market Research, Black Knight.
Walden said a large number of forbearances were expected to expire at the end of June but borrowers could be deciding to stay in plans longer than expected.
Another item to watch, he said, are unemployment benefits, as many plans are expected to expire at the end of July. He said Black Knight will be watching this trend to see if it impacts the share of mortgages in forbearance.
After three weeks of declining mortgage loan forbearance activity, forbearances surged last week, according to the McDash Flash Forbearance Tracker from Black Knight. As data revealed 8.8% of all active mortgage loans are in a state of forbearance.
This is up from 8.7% of loans that were in active forbearance as of the previous week.
Forbearances peaked the week of May 22 before falling for about three weeks. However, the increases experienced over the past five days have reversed more than half of the declines experienced over the previous few weeks.
In total, about 79,000 additional loans went into forbearance this week, bringing the total number of loans in forbearance to 4.68 million.
The most recent loan forbearance numbers mean servicers will have to pay $3.5 billion per month on behalf of GSE-backed loan holders, plus an additional $1.4 billion in taxes and insurance on behalf of these loans.
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