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Black Knight reveals COVID-19 impacts on U.S. mortgage market

Anthony Jabbour, CEO Black Knight

Black Knight on tracking loan-level forbearance and mortgage performance data reveals that as of May 19, 2020, 4.75 mn homeowners have entered into COVID-19 mortgage forbearance plans.

The impact of COVID-19 pandemic is being felt in the mortgage and real estate industry, bringing uncertainty, and rapid changes in the market conditions.

Black Knight continues to monitor the impact of the COVID-19 pandemic on the U.S. mortgage market, tracking loan-level forbearance and performance data through its McDash Flash data set and McDash Flash Payment Tracker on a daily basis.  Its daily McDash Flash data allows subscribers to track outstanding populations, upcoming forbearance expirations, payment activity, and overall forbearance performance on a near-real-time basis.

According to Black Knight CEO Anthony Jabbour, the increased insights give clients insight into not only the number of borrowers entering forbearance, but daily updates on what share of borrowers are making their mortgage payments each month, whether in forbearance or not.

The McDash Flash Forbearance tracker shows that the 4.75 mn loans in forbearance represent 9.0% of all active mortgages and account for a little over $1 T in unpaid principal. An estimated 7.1% of all GSE-backed loans and 12.6% of FHA/VA mortgages are now in forbearance.

“Of the 4.25 million homeowners who were in active forbearance as of the end of April, nearly half – 46% – still made their April mortgage payment. The fact that only 54% of borrowers in forbearance actually missed their payments helps explain the disparity between April’s delinquency and forbearance rates. However, just 21% of borrowers in forbearance have made their May payments, which could lead to another sharp increase in the national delinquency rate for May if those payments are not received before the end of the month,” said Jabbour.

The past week saw active forbearance volumes to increase by 93,000, a 70% decline from the 325,000 in the 1st week of May. The rate of increase has now declined by 93% from the 1st week of April when the number of active forbearance plans increased by almost 1.4 mn in a week. This slowdown shows chances of volumes beginning to flatten, warranting a shift in servicer focus from forbearance pipeline growth to forbearance pipeline management.

“While it appears – at least for the time being – that the surge of forbearance requests has begun to slow, for our servicing clients, it is the beginning of an entirely new challenge. Shifting to the management of such a large pipeline of homeowners in forbearance plans is paramount. Tools such as Black Knight’s Loss Mitigation solution, integrated with our MSP servicing system, will be essential in managing not only the forbearance period, but the millions of loan workouts and modifications that are bound to follow,” added Jabbour.

The McDash Flash Payment Tracker shows that, of the 4.25 mn homeowners who were in forbearance at the end of April, nearly half made April’s payment, while 54% did not. The company data shows that May seems to be shaping up a bit differently with just 21% of those in forbearance plans have made their May payments as of May 19. This means that approximately 1.4 mn homeowners in forbearance who had made April payments are currently at risk of becoming past due in May if those payments are not received before the month-end, which could lead to another sharp increase in the national delinquency rate next month.

McDash Flash data is anonymous and does not contain nonpublic personal information (NPI) or personally identifiable information (PII), but can be benchmarked and/or extrapolated up for a full-market picture.

Founded in 2014, Black Knight is a FinTech provider of integrated software, data and analytics solutions that facilitate and automate business processes across the homeownership lifecycle. It is transforming the mortgage industry by offering solutions which include Loan Servicing System, Loan Origination System and Data as a Service. The company was recently selected by Carrington Mortgage Services to enhance its efficiency & customer experience,

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