Roughly 4.75 million mortgages – representing a little over $1 trillion in unpaid principal – were in COVID-19 forbearance plans as of May 19, according to Black Knight.
That’s about 9% of all mortgages.
In an encouraging sign, the firm’s research shows nearly half of the 4.25 million homeowners in forbearance as of the end of April made April’s payment.
However, as of May 19, just 21% had made their May payments – so things could get worse in May.
Meanwhile, the rate of increase for forbearance requests continued to slow. During the week ended May 22, active forbearance volumes increased by just 93,000, a more than 70% decline from the 325,000 seen in the first week of May.
“Of the 4.25 million homeowners who were in active forbearance as of the end of April, nearly half – 46 percent – still made their April mortgage payment,” says Black Knight CEO Anthony Jabbour, in a statement. “The fact that only 54 percent of borrowers in forbearance actually missed their payments helps explain the disparity between April’s delinquency and forbearance rates. However, just 21 percent of borrowers in forbearance have made their May payments, which could lead to another sharp increase in the national delinquency rate for May if those payments are not received before the end of the month.”
Of the loans in forbearance, an estimated 7.1% are GSE-backed while 12.6% are FHA/VA-backed.
“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,” Jabbour says. “Shifting to the management of such a large pipeline of homeowners in forbearance plans is paramount.”