Active mortgage loan forbearance plans decline for first time during coronavirus crisis
Rate of requests for forbearance agreements has been slowing throughout recent weeks
As state economies across the U.S. begin reopening, fewer Americans have their mortgage payments on pause.
This week marked the first net decline in active forbearance plans since the CARES Act was enacted, according to data from Black Knight. As of June 2, 4.73 million homeowners had forbearance agreements, down from 4.76 million the prior week.
“After rising sharply in April and then leveling off toward the end of May, the number of American homeowners in forbearance plans has now decreased for the first time since the crisis began,” Black Knight CEO Anthony Jabbour said in a statement. “There were a net 34,000 fewer homeowners in forbearance as of June 2.”
About 8.9 percent of mortgages were in forbearance, accounting for slightly more than $1 trillion in unpaid principal.
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While the decline appears to signal good news for the U.S. economy, Jabbour noted there are still some concerning signs.
“According to Black Knight’s McDash Flash Payment Tracker, far fewer homeowners in forbearance remitted May payments than did in April,” Jabbour said. “If that trend holds true through the end of the month, the market should be prepared for another likely rise in the delinquency rate for May. Also, expanded unemployment benefits are scheduled to end on July 31. It remains to be seen how that will impact both forbearance requests and overall mortgage delinquencies.”
As previously reported by FOX Business, April saw the highest-ever monthly spike in U.S. mortgage delinquencies, due in large part to the millions of Americans who had put their payments on pause.
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The rate of requests for forbearance plans had been slowing throughout the past several weeks.
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The number of Americans filing for unemployment increased to more than 42 million last week. Lawmakers are debating whether to extend the $600 bump in unemployment benefits, which some Republicans argue discourages jobless individuals from seeking out new employment.
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