Forbearances, the vehicle by which many of the country’s unemployed have been able to delay their mortgage payments during the pandemic, are now dropping big time. According to Black Knight (provider of integrated technology, data, and analytics for lenders and servicers), mortgage forbearances are back to April’s levels, as reported by Jann Swanson on MortgageNewsDaily.
The company’s weekly report on the numbers of mortgage loans in COVID-19 forbearance plans shows that a decline in those numbers of nearly a half-million last week, with more than 435,000 homeowners exited the plans, the largest drop yet.
“As of July 7th, 4.14 million homeowners were in the plans which allow them to skip or reduce their mortgage payments if they are suffering financial problems due to the pandemic,” says Swanson. “This represents 7.8 percent of mortgage lenders and just under $900 billion in unpaid principal.” She adds that this is the smallest number of plans since April 28th.
She also offers context from Black Knight’s Andy Walden, economist, and director of market research.
“This latest decline in the number of homeowners in active forbearance is an encouraging sign of continued improvement,” said Walden. “The reduction of roughly 435,000 – the largest single-week drop yet – was driven at least in part by the fact that more than half of all active forbearance plans entering the month were set to expire at the end of June. While the majority of those have been extended, this week’s data suggests a significant share were not.”