The latest data from Black Knight’s Forbearance Tracker shows that, after last week’s rise following three consecutive weekly declines, the number of homeowners in active forbearance has fallen once again – and by the largest amount yet. Overall, the number of active forbearance plans is down 104K from last week for the lowest weekly total active forbearances since the first week of May. This latest drop brings back the trend of improvement seen throughout June.
As of June 30, 4.58 million homeowners are in forbearance plans, representing 8.6% of all active mortgages, down from 8.8% last week. Together, they represent just under $1 trillion in unpaid principal ($995B). 6.8% of all GSE-backed loans and 12.3% of all FHA/VA loans are currently in forbearance plans. Another 9.3% of loans in private label securities or banks’ portfolios are also in forbearance.
What remains to be seen is what impact the new spikes in COVID-19 around much of the country will have on forbearance requests moving forward. If they lead to another round of shutdowns – or extensions of those already in effect – and put upward pressure on unemployment numbers, we could see yet another reversal of this trend. The same holds true for the looming expiration of expanded unemployment benefits.