Black Knight has been tracking daily loan-level forbearance data via our new McDash Flash data set to provide a timely view of the impact of COVID-19 on the U.S. mortgage market.
We are currently enhancing our COVID-19 forbearance analysis in order to more accurately identify even those forbearances that may not have been specifically coded as such by individual McDash contributors. Next week’s numbers will reflect this enhanced reporting.
The latest data from the McDash Flash Forbearance Tracker shows that as of May 7, nearly 4.1 million homeowners are in forbearance programs with their lenders. Together, they represent 7.7% of the entire active mortgage universe and $890 billion in unpaid principal and account for 6.4% of all GSE-backed loans and 11% 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) as well as tax and insurance (T&I) payments each month for these loans. At today’s level, mortgage servicers would need to advance $4.5 billion in P&I and T&I to holders of government-backed mortgage securities on COVID-19-related forbearances each month. Another $2.1 billion in lost funds will be faced each month by those with portfolio-held or privately securitized mortgages.
Given FHFA’s recently announced four-month limit on P&I advance obligations, servicers of GSE-backed mortgages still face $8 billion in advances based on the number of forbearance plans through May 7. That is in addition to $800 million per month in T&I payments, on which there is no cap.
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.