Forbearances spike after 3 weeks of decline

The spike erases about half the progress made since May 22, says Black Knight

Forbearances spike after 3 weeks of decline

The number of homeowners in forbearance rose this week after three straight weeks of decline, according to new data from Black Knight.

The number of active forbearance plans is up 79,000 from last week, with rises seen over each of the past five business days, Black Knight reported. The spike in forbearances erased about half of the improvement seen since the forbearance peak on May 22.

As of June 23, 4.68 million homeowners were in forbearance plans, representing 8.8% of all active mortgages, Black Knight said. That’s up 8.7% from last week. Altogether, the mortgages currently in forbearance represent just over $1 trillion in unpaid principal.

“Some 6.9% of all GSE-backed loans and 12.5% of all FHA/VA loans are currently in forbearance plans,” Black Knight said. “Another 9.6% of loans in private label securities or banks’ portfolios are also in forbearance.”

At the current level, mortgage servicers may need to advance up to $3.5 billion per month to holders of government-backed mortgage securities on COVID-19-related forbearances, Black night said. That’s in addition to $1.4 billion in T&I payments servicers must make on behalf of borrowers.