Friday, May 15, 2020

Black Knight: 4.7 Million Homeowners Now in COVID-19-Related Forbearance Plans, 8.8% of Mortgages

by Calculated Risk on 5/15/2020 10:18:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

From Black Knight: 4.7M Homeowners Now in Forbearance, But Pace is Slowing Considerably

• As of May 12, approximately 4.7 million homeowners are in forbearance plans, up from a revised 4.5 million one week prior.

• The pace of new forbearance plans has slowed considerably – there was an average net increase of just under 26K per day over the past week. That’s a reduction of more than 85% of the rate we saw back in early April.

• Using a momentum-based approach based on the one-week average and assuming an optimistic 10% daily decline moving forward, we would see 4.9 million loans in forbearance by the end of May (9.2% of active mortgages) and just under 5 million (9.4%) by the end of June.

• A more pessimistic scenario, in which the two-week average rolls forward and the 10% daily decline doesn’t manifest until June 15th, could result in as many as 5.4 million loans (10.1%) in forbearance by the end of the month, and nearly 6.3 million (11.8%) by the end of June.

• Together, the 4.66M represent 8.8% of all active mortgages and more than $1 trillion in unpaid principal.