Black Knight is tracking loan-level forbearance and mortgage performance data via our McDash Flash daily data set to provide the timeliest view of the impact of COVID-19 on the U.S. mortgage market.
The latest data from the McDash Flash Forbearance Tracker shows that as of May 19, 2020, 4.75 million homeowners – or 9.0% of all mortgages – have entered into COVID-19 mortgage forbearance plans, representing a little over $1 trillion in unpaid principal balances. An estimated 7.1% of all GSE-backed loans and 12.6% of FHA/VA mortgages are now in forbearance.
While we have seen the pace of new forbearance plans tick up slightly in recent days, the number of active forbearances increased by just 93,000 over the past week, a more than 70% decline from the 325,000 in the first week of May. The rate of increase has now declined by 93% from the first week of April when the number of active forbearance plans increased by nearly 1.4 million in a single week.
This slowdown suggests that volumes may be beginning to flatten, warranting a shift in servicer focus from forbearance pipeline growth to forbearance pipeline management. Black Knight’s daily McDash Flash data allows subscribers to track outstanding populations, payment activity, upcoming forbearance expirations and overall forbearance performance on a near-real-time basis.
As Black Knight CEO Anthony Jabbour put it, “While it appears – at least for the time being – that the surge of forbearance requests has begun to slow, for our servicing clients it is the beginning of an entirely new challenge. Shifting to the management of such a large pipeline of homeowners in forbearance plans is paramount. Tools such as Black Knight’s Loss Mitigation solution, integrated with our MSP servicing system, will be essential in managing not only the forbearance period, but the millions of loan workouts and modifications that are bound to follow.”
Our new McDash Flash Payment Tracker (which draws upon the same daily, loan-level data as our forbearance tracker) shows that – of the 4.25 million homeowners who were in forbearance at the end of April – nearly half made April’s payment, while 54% did not.
So far, May seems to be shaping up a bit differently.
Daily mortgage performance observations via the McDash Flash Payment Tracker over the past few weeks show that as of May 19, just 21% of those in forbearance plans have made their May payments.
This means that approximately 1.4 million homeowners in forbearance who had made April payments are currently at risk of becoming past due in May if those payments are not received before the end of the month, which could lead to another sharp increase in the national delinquency rate next month.
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.