In light of the significant impacts the COVID-19 pandemic is having on the U.S. mortgage market, Black Knight has begun tracking loan-level forbearance data on a daily basis through its newly introduced McDash Flash data set. This level of detail is essential for both mortgage market participants and government entities in addressing the economic ramifications of this crisis.
Leveraging Black Knight’s extensive loan-level mortgage data and proprietary analytics, the company has created the high-level McDash Flash Forbearance Tracker report, which will be made available to all Black Knight MSP servicing clients and McDash loan-level performance data set contributors on a daily basis beginning next week. In addition, multiple government agencies and the government sponsored enterprises (GSEs) will be able to receive these updates, as well. Deeper insights, including industry aggregate, custom reporting and daily loan-level performance data will also be offered.
The latest data from the McDash Flash Forbearance Tracker shows that as of April 16, more than 2.9 million homeowners are in forbearance programs with their lenders. Together, they represent 5.5% of the entire active mortgage universe and $651 billion in unpaid principal.
This population encompasses 4.9% of all GSE-backed loans and 7.6% of FHA/VA loans. Regardless of a borrower’s forbearance status, servicers of loans in government-backed securities must make advance principal and interest (P&I) payments each month for these loans. At today’s level, mortgage servicers would need to advance $2.3 billion to holders of government-backed mortgage securities on COVID-19-related forbearances each month. Another $1.1 billion in lost funds will be faced each month by those with portfolio-held or privately securitized mortgages.
While Ginnie Mae has announced a pass-through assistance program through which it will advance principal and interest payments to investors on behalf of servicers, at present there is no such program in place for mortgages backed by the GSEs. Nearly 5% of loans backed by the GSEs are currently in forbearance, and given the stark weekly increases in unemployment numbers, that share is likely to grow in the coming weeks.
Much more detail on the impact of COVID-19 on the mortgage and real estate industries, as well as challenges and solutions relevant to individual market segments, can be found in Black Knight’s special white paper, available to download for free at this link. Black Knight will continue to provide weekly McDash Flash Forbearance Tracker updates via Vision, the Black Knight 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.