Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.
This data is as of September 1st.
After holding flat for the last couple of weeks, the total number of mortgages in active forbearance saw stronger than expected improvement, with the number of active forbearance plans declining by 147k (-4%) over the past week.
Active forbearances are now down about 1M (-21%) since the peak in May.
According to Black Knight’s McDash Flash Forbearance Tracker, as of September 1, 3.8M mortgages remain in active COVID-19 related forbearance plans, representing 7.1% of all active mortgages, down from 7.4%. Together, they represent $804 billion in unpaid principal. Of these, 75% have had their terms extended
As we covered in the most recent Mortgage Monitor report, forbearance starts have shown little impact from the reduction in expanded unemployment benefits thus far. Through the first four weeks of August, forbearance starts were down 13% M/M from the comparable 4-week period in July. September may provide the true test, though, as impacted borrowers were still receiving full expanded unemployment benefits up through July 31.
More than 2M COVID-19-related forbearance plans are now set to expire in September, setting up a significant volume of extension/removal activity in late September/early October, reminiscent to what was seen in late June and early July, albeit to a slightly lesser degree.
CR Note: I’m still expecting another disaster relief package soon, but we might see an increase in forbearance activity in the coming weeks as we wait for additional relief.