Adam Constantine on MLK Jr.’s impact on housing equality

During the interview, Constantine explains why the industry needs to focus on evoking intentional change rather than launching lackluster initiatives.

Managing Credit Risk in 2021 and Beyond

Join a panel of industry experts as they provide an economic outlook for 2021 and a discussion with regional bankers on how they are managing credit risk over the next several years.

Amid record-high origination volumes, mortgage fraud risk is down

CoreLogic's recently released Mortgage Fraud Report is the industry standard for nationwide fraud monitoring and analysis. Read the findings here.

Empowering women to be financially great with Dava Davin

Women of Influence winner Dava Davin joins Girlfunds to discuss everything from her best financial tip to her advice on starting the home-buying process.

CoronavirusMortgage

Nearly 3 million borrowers are already in forbearance

GSE loans in forbearance now exceed FHFA Director Calabria’s projection

It appears the forbearance issue is already much more significant than federal decision-makers thought it would be.

Federal Housing Finance Agency Director Mark Calabria told HousingWire last week that his expectation was that approximately 1 million GSE mortgages will be in forbearance by May, but new data from Black Knight shows that the number of GSE mortgages in forbearance already far exceeds Calabria’s projection.

According to Black Knight, nearly 1.4 million borrowers whose mortgages are backed by Fannie Mae and Freddie Mac are already in forbearance.

To ascertain this data, Black Knight reviewed a sample set of loans that represent the majority of the mortgage market and extrapolated that data across the entire mortgage landscape.

Black Knight’s data shows that overall, more than 2.9 million mortgages are in forbearance as of April 16. That figure represents 5.5% of all active mortgages.

Image courtesy of Black Knight. Click to enlarge

In total, those loans represent $651 billion in unpaid principal balance.

The figure also shows just how quickly the number of borrowers needing forbearance is growing.

Data released earlier this week by the Mortgage Bankers Association showed that 3.74% of all borrowers were in forbearance as of April 5.

Image courtesy of Black Knight. Click to enlarge

The data from Black Knight also shows that forbearance is more prevalent among loans backed by the Federal Housing Administration and the Department of Veterans Affairs.

According to Black Knight, 7.6% of the loans backed by the FHA and VA are currently in forbearance. Put another way, approximately 922,000 of the 12.1 million FHA and VA loans are in forbearance.

But the forbearance situation isn’t limited to GSE or government-backed loans.

According to Black Knight, nearly 5% of loans held either in portfolio or privately securitized are also in forbearance.

The issue of growing forbearance demonstrates the need for a solution for mortgage servicers that are required to advance principal and interest payments to investors on loans that are in forbearance.

Over the last few weeks, parties from all sides have called on the government to set up a forbearance liquidity facility for mortgage servicers.

Black Knight’s data highlights just how big of a problem that already is.

According to the report, at the current forbearance rate, mortgage servicers would need to advance $1.5 billion per month to holders of GSE-backed mortgage securities.

Beyond that, servicers on portfolio or privately-backed mortgages would need to advance another $1.1 billion per month.

Image courtesy of Black Knight. Click to enlarge

And while there is a program in place to aid servicers on FHA and VA mortgages, there is no such facility set up for GSE or private mortgages, despite the growing requests for one.

Most Popular Articles

Prepare for the rise in mortgage rates

Economists offer their takes on how high mortgage rates will climb, how lenders will respond and what impact this will have on the housing market. HW+ Premium Content

Jan 18, 2021 By

Latest Articles

Housing industry welcomes President Joe Biden

The housing industry welcomed President Joe Biden after he was sworn in as the 46th president of the U.S., and Vice President Kamala Harris, who became the first woman to serve in the office.

Jan 20, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please