- Mortgage forbearances now represent 4.1M borrowers or 7.7% of all active mortgages
- Forbearance numbers represent $890B in unpaid principal
Black Knight, a provider of integrated technology, data and analytics relied upon by lenders and mortgage servicers, indicated an additional 225,000 borrowers opted into the bank and government forbearance programs this last week. These additional 225,000 borrowers tipped the scales upward to nearly 4.1M homeowners who are not making their monthly mortgage payments. These forbearances represent 7.7% of all active mortgages.
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The $890B in unpaid mortgages in forbearance also includes 6.4% of all Fannie and Freddie-backed loans and 11% of all FHA/VA loans.
Approximately one half as many borrowers requested forbearance relief than the week prior. Ben Graboske, president of Black Knight, said, “After surging at the beginning of April and then rising again near the 15th – when most mortgages become past due and late fees are charged – the number of new forbearance requests has declined in recent weeks.”
Under this government forbearance program as specified within the CARES Act, borrowers can miss mortgage payments for up to 90 days and can then apply for extensions with their lenders for up to one year. Such forbearance programs are loans, not grants, and must be repaid. Lenders and borrowers are to work out repayment plans and/or mortgage modifications among themselves.
Meanwhile, even with mortgages in forbearance and borrowers not paying their monthly mortgage payments, mortgage servicers are required by law to advance those payments to bond holders for four moths. Those advanced payments at today’s interest levels translates into servicers advancing a combined $4.5B/month to holders of government-backed mortgages on top of another $2.1B to holders of privately securitized mortgages.
Thanks to CNBC.