For the first time since the coronavirus pandemic began, the number of mortgage borrowers in a forbearance plan has declined on a week-to-week basis, Black Knight said.
"After rising sharply in April and then leveling off toward the end of May, the number of American homeowners in forbearance plans has now decreased for the first time since the crisis began," said Black Knight CEO Anthony Jabbour in a press release. "There were a net 34,000 fewer homeowners in forbearance as of June 2."
"The decline was actually greater among government-backed mortgages, which saw 43,000 fewer total forbearance plans than last week, but this was partially offset by an increase of 9,000 new plans on mortgages held in bank portfolios and private-label securities," he added.
As a result, there are now 4.73 million loans in forbearance, or 8.9% of all active mortgages. That represents a little over $1 trillion in unpaid principal. This compared with 4.76 million loans, or 9% of active mortgages in a forbearance plan
This week's report states that an estimated 7.1% of Fannie Mae and Freddie Mac loans, along with 12.3% of Federal Housing Administration-insured and Veterans Administration-guaranteed mortgages are now in forbearance.
The Biden administration once again extended the pause on student loan payments enacted to help borrowers during the COVID-19 pandemic, this time through the end of August.
The two states' combined plans amount to over $1.5 billion of the Homeowner Assistance Fund included within the American Rescue Plan Act , which was passed a year ago.
An uptick in pandemic-related payment suspensions reflecting new or restarted plan activity previously occurred as the omicron variant spread, but activity has since subsided.
There are under 1.25 million private-label and portfolio mortgages (which includes jumbo loans) in a forbearance, with an unpaid principal balance of $369 billion. Unlike conforming or government mortgage borrowers, these mortgagors were not granted forbearance rights by the
Last week, there were 1.24 million private-label mortgages in a forbearance plans, with an unpaid principal balance of $368 billion.
The decline is driving a shift in servicers' focus, from dealing with forbearance pipeline growth to the
According to Black Knight's payment tracker, "far fewer homeowners in forbearance remitted May payments (22%) than did in April (46%)," Jabbour said.
"If that trend holds true through the end of the month, the market should be prepared for another likely rise in the delinquency rate for May," he added. "Also, expanded unemployment benefits are scheduled to end on July 31. It remains to be seen how that will impact both forbearance requests and overall mortgage delinquencies."
