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Forbearances are Leveling Out, With Long-Term Delinquencies now a Concern
Friday, August 21, 2020
The
financial impacts of the COVID-19 pandemic are beginning to emerge and while it
appears the crisis initially hit homeowners hard, the duration of the problem
is murky. Short term delinquencies are declining, with fewer homeowners
entering forbearance, while serious delinquencies are rising. We summarize the
results from Black Knight's most recent weekly forbearance report and its "first
look" at July loan performance below and will report on the Mortgage Bankers
Associations National Delinquency Survey for the 2nd quarter later
today. Black Knight
says overall delinquencies continued to improve in July, declining by 9 percent
from June to a rate of 6.91 percent with 342,000 fewer loans past due. However,
the delinquency rate is double that of July 2019, and 1.885 million more
homeowners are 30 or more days behind in their mortgage payment than then, bringng
the total to 3.692 million. That number
does not include loans in foreclosure but does include loans in formal
forbearance plans.
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