Expanding Economy Makes Foreclosure Wave Less Likely
Two-thirds of homeowners in forbearance have already started making monthly payments – and March had the best single-month improvement in delinquencies in 11 years.
SAN FRANCISCO – Many homeowners granted forbearance on their mortgage payments during the pandemic will reach their 18-month program eligibility limit at the end of September.
However, two-thirds of the 7.1 million homeowners granted forbearance during the pandemic have already left forbearance, with most of this “bellwether” group either resuming their monthly loan payments or paying them off.
Black Knight classified about 160,000 homeowners who had exited forbearance as being at “high risk” of foreclosure as of April 20 because they’re not enrolled in a loss mitigation plan and remain delinquent.
“Bellwether forbearances – homeowners who entered into forbearance early in the pandemic and who will determine the impact of the initial wave of 18-month expirations – have made up a significant share of the improvement, a good sign for the overall recovery,” concludes Black Knight’s latest Mortgage Monitor report.
The number of foreclosure starts was up 28% in March to 5,000, but the total number of homes in foreclosure fell to another record low, 162,329, as forbearance programs and foreclosure moratoriums continue to provide protection for homeowners.
“Not only did March see the largest single-month improvement in delinquencies in 11 years, but all indications suggest more is yet to come,” says Black Knight’s Ben Graboske.
As of April 23, 91.6% of mortgage holders were current on their monthly payments, up from 91% in March – and the largest share for any month during the pandemic.
Source: Inman (05/03/21) Carter, Matt
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