Serious Delinquencies And Forbearances Improve

Black Knight, Inc. released insights on both serious mortgage delinquencies and forbearances which showed that both have improved from the start of the COVID-19 pandemic.

Serious delinquencies improved in September 2020 for the first time since the beginning of the COVID-19 pandemic, according to Black Knight's first look at the September 2020 month-end mortgage performance statistics. The statistics are derived from Black Knight's loan-level database, which represents the majority of the national mortgage market. In its preview of the September report, Black Knight revealed the total U.S. loan delinquency rate sits at 6.66%. This represents a month-over-month change of -3.10%.

Meanwhile, Black Knight's McDash Flash Forbearance Tracker revealed that the market has seen a modest improvement in forbearances in the past week. Forbearance volume dipped by 11,000 from the previous week, which was the result of a 14,000 decline in GSE loans and a 2,000 decline in portfolio-held and privately securitized loans being offset by an increase of 5,000 in FHA/VA loans in forbearance.

"As of Oct. 20, nearly 3 million borrowers remain in active COVID-19 forbearance plans, which represents 5.6% of first lien mortgages," according to Black Knight. "This is a noticeable reduction from the market’s peak of 4.76 million in late May. More than 80% of remaining forbearance plans have had their terms extended with their servicer."

Additionally, overall forbearance volumes are down 623,000 month-over-month following a sharp reduction of loans in active forbearance plans at the beginning of the month. Black Knight notes that while active forbearance numbers are moving in the right direction, the pandemic is still forcing unprecedented market conditions.