The number of mortgages in forbearance fell for the second consecutive week, Black Knight said in a report on Friday.
The number of loans with suspended payments dropped to 4.66 million this week from 4.73 million, the mortgage data firm said. Measured as a share of all mortgages, forbearances dropped to 8.8% from 8.9% in the prior week, according to the Black Knight data.
Millions of Americans sought help with their mortgages after the COVID-19 pandemic sent the U.S. economy into the steepest contraction in more than eight decades.
GDP probably will fall 38% in the second quarter before rebounding 24% in the third quarter and 11% in the final three months of the year, according to a forecast on Tuesday from Wells Fargo economists.
About 7% of mortgages backed by Fannie Mae and Freddie Mac are now in forbearance, down from 7.1% last week, the report said. That’s about 2 million mortgages with an unpaid principal balance of $411 billion.
About 12.2% of home loans back by the Federal Housing Administration and the Veterans Administration have suspended payments, Black Knight said. That’s about 1.5 million home loans with an unpaid principal balance of $253 billion, the report said.
In addition, there are 1.2 million private-market mortgages in forbearance, representing a 9.5% share, Black Knight said. Private-market mortgages aren’t backed by a government agency or a GSE. They could be jumbo mortgages held by banks or home loans packaged into private-label bonds. The unpaid principal balance for those mortgages is $364 billion.
The decline in total forbearances was only the second weekly drop since the CARES Act was enacted by Congress at the end of March.
The CARES Act mandated that Americans with government-backed loans who were economically impacted by COVID-19 be provided with the option to suspend mortgage payments for up to 12 months.