The latest data from the McDash Flash Forbearance Tracker shows that, after last week’s rise following three consecutive weekly declines, the number of homeowners in active forbearance has fallen once again – and by the largest amount yet.
Overall, the number of active forbearance plans is down 104K from last week for the lowest weekly total active forbearances we’ve seen since the first week of May. This latest drop brings us down 183K from the peak on May 22 and brings us back to the trend of improvement we’d seen throughout June.
So, the question is obviously: why? While there is nothing concrete to point to in the data, we are past the 15th of the month late fee milestone, and more than half of active forbearance plans – which were set up with initial 90-day forbearance periods – were set to expire in June.
According to daily mortgage payment tracking data, as of the end of June, roughly a quarter of homeowners in forbearance had remitted their June payment. That’s as compared to 46% in April and approximately 30% in May.
In any case, as of June 30, 4.58 million homeowners are in forbearance plans, representing 8.6% of all active mortgages, down from 8.8% last week. Together, they represent just under $1 trillion in unpaid principal ($995B).
Some 6.8% of all GSE-backed loans and 12.3% of all FHA/VA loans are currently in forbearance plans. Another 9.3% of loans in private label securities or banks’ portfolios are also in forbearance.
What remains to be seen is what impact the new spikes in COVID-19 around much of the country will have on forbearance requests moving forward. If they lead to another round of shutdowns – or extensions of those already in effect – and put upward pressure on unemployment numbers, we could see yet another reversal of this trend. The same holds true for the looming expiration of expanded unemployment benefits.
Black Knight will continue to provide weekly McDash Flash Forbearance Tracker updates via this blog. Those interested in staying up to date