9% of All Mortgages are in COVID-19 Forbearance Plans

Mish

9 percent of mortgages are in forbearance but the pace of increase has tapered off.

The latest data from the McDash Flash Forbearance Tracker shows that the surge in mortgage forbearance plans has tapered off.

Estimated Monthly Advances 

Estimated monthly advances black knight 2020-05-22

Key Points

  • As of May 19, 2020, 4.75 million homeowners , 9.0% of all mortgages, have entered into COVID-19 mortgage forbearance plans.
  • The unpaid principal balance is over $1 trillion.
  • An estimated 7.1% of all GSE-backed loans and 12.6% of FHA/VA mortgages are now in forbearance.
  • The rate of increase has now declined by 93% from the first week of April when the number of active forbearance plans increased by nearly 1.4 million in a single week.

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Mish

Comments (24)
No. 1-9
Tony Bennett
Tony Bennett

The rubber will meet the road in a couple of months

as 8 weeks of PPP and $600 / week extra (thru July 31st) end.

Of course, it will only take a single tweet for DJT to go from A Quick Beautiful V Shape Recovery ... to Need $trillions MOAR!

Put me down for latter ... especially now that Kudlow hedging his bet.

But a can kick (or 3) won't change ultimate destination for housing. Down.

Tony Bennett
Tony Bennett

No point in forbearance unless absolute only option ... as lenders generally want it ALL paid back in lump sum ... or extra payments in relative short amount of time.

Six000mileyear
Six000mileyear

Add this statistic: The number of mortgages in forbearance is more than 85% of the annual sales of existing homes for April. That speaks volume about the supply of foreclosures that will eventually be placed on the market.

Bam_Man
Bam_Man

I have a feeling all GSE/VA-backed loans will be re-cast into 100-year mortgages.

Where that would leave you as an MBS holder seems "unclear".
Perhaps the Fed just buys them all at par.

Sechel
Sechel

Read this last week. For now the stress is mostly being felt by servicers who must advance. The mortgage sector most stressed right now are CMBS AND CLO's. Since it can take up to two years to foreclose and liquidate I think this can be dealt with. Some in forbearance will get rehired or have means to other assets. Also unlike 2008 properties are not underwater.

Blurtman
Blurtman

Please choose which category of loan you would like your $10,000 Biden-Warren dollars to be applied to:

  1. Student loan
  2. Mortgage loan
  3. Auto loan
  4. Margin loan
  5. Credit card debt
  6. Gambling debt
  7. Illegal drug loan
  8. Escort loan
  9. Alimony
  10. All of the above
Casual_Observer
Casual_Observer

And more Fed bailouts for RMBS for both residential and commercial loans.

thimk
thimk

forbearance rules for Fannie are pretty sweet. But those property taxes have to get paid . Looks like service providers (which some are banks) are stuck with this. they will want their money back sooner.

Brochacho
Brochacho

Basically just back to the days of the neg am loans


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