3M homeowners remain in forbearance

80% of deferment plans have been extended, according to Black Knight

National /
Oct.October 23, 2020 06:30 PM
The number of mortgage borrowers in Covid-19 forbearance plans ticked down again this week. (iStock)

The number of mortgage borrowers in Covid-19 forbearance plans ticked down again this week. (iStock)

Nearly 3 million U.S. homeowners were in forbearance programs as of this week, a massive amount but still a sharp drop from 4.76 million at the height of the pandemic.

That’s according to a new report from mortgage-data firm Black Knight, which also found significant drops in weekly totals. There were 11,000 fewer homeowners in Covid-19 mortgage forbearance programs with their lenders than the week prior.

Loans backed by Fannie Mae and Freddie Mac, as well as portfolio-held and privately securitized loans, all saw decreases in forbearance volume. But there was an increase among mortgages held by the Federal Housing Administration and the Department of Veterans Affairs.

The figures build on an overall 17 percent decrease in forbearance since September, representing a decrease of 623,000 applications month-over-month.

Forbearance programs for both residential and multifamily property owners were introduced earlier this year by lenders — or mandated by state governments, as in the case of New York, in response to the pandemic. Most borrowers who have forbearance agreements have chosen to renew them, as 80 percent of forbearance plans have had their terms extended, according to the report.

Still, Black Knight found that as of September, at least 1 million borrowers were 30 days past due on their mortgages and not in a forbearance program. Of those, 680,000 have federally guaranteed mortgages and therefore qualify for a forbearance plan. While the rest do not, some lenders offered forbearance regardless.

While many struggling homeowners did not request forbearance plans, some lenders put mortgages into forbearance without consulting the borrowers. Researchers at the Committee for Better Banks found that banks sometimes offered forbearance as the only option to homeowners — at times requiring balloon payments at the end of the grace period.

In August, Wells Fargo was sued for placing borrowers’ mortgages into forbearance without their knowledge, which affected their credit scores.


Related Articles

arrow_forward_ios
Ben Schachter, Sean Black and Mike Pappas (Signature, Getty, Keyes)

Knock expands home lending program into South Florida 

Knock expands home lending program into South Florida 
Simon and David Reuben with St. Regis Bal Harbour (Getty, Google Maps)

Reuben Brothers takes over $132M loan backing St. Regis Bal Harbour

Reuben Brothers takes over $132M loan backing St. Regis Bal Harbour
Florida Gov. Ron DeSantis (Credit: Joe Raedle/Getty Images)

DeSantis says restaurants in Florida can operate at up to 100% capacity

DeSantis says restaurants in Florida can operate at up to 100% capacity
Peter Vauthy and Red South Beach (Getty)

The Weekly Dish: Red South Beach signs $5M lease for new space & more

The Weekly Dish: Red South Beach signs $5M lease for new space & more
Miami-Dade County Mayor Carlos A. Gimenez (Credit: Jason Koerner/Getty Images)

Miami-Dade police said pre-Covid evictions could resume. Then came mayor’s stop order

Miami-Dade police said pre-Covid evictions could resume. Then came mayor’s stop order
Miami-Dade County Mayor Carlos A. Gimenez (Credit: Jason Koerner/Getty Images)

Miami-Dade begins phase 2 reopening: movie theaters, bowling alleys and more

Miami-Dade begins phase 2 reopening: movie theaters, bowling alleys and more
Florida Gov. Ron DeSantis (Credit: Joe Raedle/Getty Images)

DeSantis moves Miami-Dade, Broward counties into phase two

DeSantis moves Miami-Dade, Broward counties into phase two
Gov. DeSantis (Credit: Joe Raedle/Getty Images)

Drink up: Bars can reopen Monday in the Florida Keys — but not in rest of South Florida

Drink up: Bars can reopen Monday in the Florida Keys — but not in rest of South Florida
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...