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Forbearances Rise After Three Weeks of Declines

Forbearances Rise After Three Weeks of Declines

The latest data from the McDash Flash Forbearance Tracker shows that the number of homeowners in active forbearance rose this week after three consecutive weeks of declines.

Overall, the number of active forbearance plans is up 79K from last week – erasing roughly half of the improvement seen since the peak of May 22 – with rises seen over each of the past five business days.

As of June 23, 4.68 million homeowners are in forbearance plans, representing 8.8% of all active mortgages, up from 8.7% last week. Together, they represent just over $1 trillion in unpaid principal ($1,025B).

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

Volumes were up across the board from the week prior with the largest increase among FHA/VA loans (+42K), with smaller increases seen in GSE (+25K) and non-agency (+12K) loans.

At today’s level, mortgage servicers may need to advance up to $3.5 billion/month to holders of government-backed mortgage securities on COVID-19-related forbearances. That’s on top of up to $1.4 billion in T&I payments they must make on behalf of borrowers.

Reminder: P&I advance payments have been capped at four months for servicers of GSE-backed mortgages. Given today’s number of loans in forbearance, servicers of GSE-backed loans still face up to $8.4 billion in advances over that four-month period.

Black Knight will continue to provide weekly McDash Flash Forbearance Tracker updates via this blog. Those interested in staying up-to-date on industry developments are encouraged to visit the blog for more information in the coming days and weeks.