The number of mortgages in active forbearance rose by 15,000 in the last week of 2020, according to a report on Friday from Black Knight. Though the raw number increased for the third consecutive week, the number of mortgages in active forbearance remained at 5.3%, unchanged from the two prior weeks.
Last week’s uptick was largely driven by the share of Federal Housing Administration and Veterans Administration‘s loans in forbearance rising some 11,000 from 9.5% to 9.6%.
Loans in forbearance as a share of private label securities or banks’ portfolios also gained by 4,000 and rose 10 basis points to 5.4%.
While the share of Fannie Mae and Freddie Mac loans seemed to teeter back and forth in weeks prior, the GSE’s forbearance portfolio share remained unchanged at 3.5%.
Overall, Black Knight estimates 2.83 million homeowners are in some form of forbearance heading into the new year, and due to the holiday weekend, forbearance plan removals fell to their lowest level since the start of the pandemic.
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According to the report, 270,000 plans were set to expire at the end of December, and another 367,000 by the end of January.
Expirations over entries are now far more likely heading in to 2021 as the deadline to request initial forbearance for FHFA single-family mortgages hit on Dec. 31. Six-month extensions, though, are still on the table, as are forbearance requests for multifamily property owners through March 31.
But don’t count entries out just yet as the FHA announced on Dec. 21 it was extending it’s deadline for single-family borrowers to request initial forbearance through Feb. 28. If those borrowers choose to take the full year’s worth of forbearance, some FHA borrowers may not exit their plans until February, 2022.
As of Dec. 21, the Mortgage Bankers Association estimates 29.8% of forbearance exits from June 1 through Dec. 13 were borrowers who continued to make their monthly mortgage payments. However, 13.2% represented borrowers who did not, and exited without a loss mitigation plan in place.
While servicers attempt to navigate the millions of borrowers in forbearance, a second round of stimulus checks was also released on Dec. 21 with an eviction ban attached through January and $25 billion in emergency rental assistance to combat an eviction crisis.
Michael Sklarz, who leads Black Knight Data and Analytics’ Collateral Analytics team, predicts that rather than face foreclosure, many homeowners nearing the expiration of their forbearance plans under the CARES Act might put their properties up for sale.
Justin Malonson is the Founder of LyfeLoop a 16+ year tech innovator, investigative media researcher and host of the Freedom Not Control Podcast live on Voice America. Justin is a highly sought-after tech entrepreneur, industry speaker and winner of the coveted Business Achievement Awards “Top Digital Marketer” award. With 16+ years of demanding experience, Justin has worked with over 3,000 businesses including amazing clients such as Blue Cross Blue Shield Association, Sotheby’s International Realty, Duke University, White House Black Market,Tiffin Motorhomes, Bass Pro Shops and Beazer Homes USA.