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More Americans Miss House Payments

Another 723,000 homeowners became past due on their mortgages in May, pushing the national delinquency rate to its highest level in 8.5 years, according to the First Look at May mortgage data from Black Knight. There are now 4.3 million homeowners past due on their mortgages or in active foreclosure, including those in forbearance who have missed scheduled payments as part of their plans, up from 2 million at the end of March.

Serious delinquencies are on the rise as well, increasing by more than 50% over the past two months. However, Black Knight’s McDash Flash Payment Tracker shows a higher share of payments have been made thus far in June than at the same time in May, suggesting the rise in delinquencies may be leveling off.

The latest data from the Black Knight McDash Flash Forbearance Tracker shows that the number of mortgages in active forbearance fell for the third week in a row. Overall, the number of active forbearance plans is down 57,000 from last week and 158,000 from the peak the week of May 22.

Additionally, according to the McDash Flash Payment Tracker, just 15% of those in forbearance had remitted their June payments as of June 15. That’s compared to 46% as of the end of April and 28% as of May month-end.

At these levels, mortgage servicers need to advance a combined $3.4 billion a month to holders of government-backed mortgage securities on COVID-19-related forbearances. That’s on top of the $1.4 billion in T&I payments they must make on behalf of borrowers.Both foreclosure starts and sales (completions), halted by COVID-19 moratoriums, remain at record lows. The share of homeowners in active foreclosure has fallen to its lowest level on record since Black Knight began reporting the figure in January 2000.

COVID-19-related impacts on April purchase and refinance locks resulted in mortgage prepayments edging downward, but with 30-year rates near record lows, the potential for increased prepay activity remains.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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