Black Knight which tracks forbearances on a weekly basis, reported an increase of 1% in forbearance activities. While 1% may sound small but it actually means 30,000 homeowners.
The expiration of the initial 6-month moratorium on mortgages early this month is believed to be the culprit behind the increase. There were only 50,000 forbearance removals this week, the lowest of any week during the recovery, while the 89,000 extensions were the fewest since the last nine weeks.
Black Knight’s McDash Flash data breaks down forbearances by FHFA, FHA, and other types of loans:
The increase was driven by borrowers reactivating previously expired plans. New forbearance activations are down 7% from September, while re-activations are up 50%. This is most likely in reaction to the large volume of plans than were removed early in the month, according to Black Knight.
The report as shown below is updated each Friday. As of Oct. 27, the number of active forbearances has driven back up over 3 million again for the first time since early October, representing approximately 5.7% of all active mortgages, up from 5.6% from last week.
All these forbearances represent $619 billion in unpaid principal.
Forbearance is not the solution, rather a temporary patch. Information is power during these stressful times. It is always best to consult early rather than wait for the worst.
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