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Over 6% of All Mortgages Now in  Forbearance

Black Knight released the following points regarding mortgage forbearance.

  • According to the Black Knight McDash Flash Forbearance Tracker, as of April 23, 2020, more than 3.4 million homeowners – or 6.4% of all mortgages – have entered into COVID-19 mortgage forbearance plans
  • This population represents $754 billion in unpaid principal and includes 5.6% of all GSE-backed loans and 8.9% of all FHA/VA loans
  • At today’s level, mortgage servicers are bound to advance $2.8 billion of principal and interest payments per month to holders of government-backed securities on COVID-19-related forbearances
  • Another $1.3 billion per month in lost funds is faced by those with portfolio-held or privately-securitized mortgages
  • Ginnie Mae had announced a pass through assistance program through which it will advance principal and interest payments to investors on behalf of servicers and FHFA very recently announced that P&I advance payments will be capped at four months for servicers of GSE-backed mortgages.
  • Given FHFA’s recently announced four-month limit on advance obligations, servicers of GSE-backed mortgages could still face more than $7 billion in advances based on the number of forbearance plans thus far
  • Regardless of a borrower’s forbearance status, servicers of loans in government-backed securities must make advance principal and interest (P&I) payments each month for these loans. 

Forbearance Totals

Estimated Monthly Advances

For now, advances from GSE servicers will cover forbearances. 

But only for 4 months and it will not cover any losses from those advances.

Servicers of lenders of non-GSE loans have additional issues.

Mish

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16 Comments
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Jdog1
Jdog1
6 years ago

This is going to get really ugly. I expect most people applying for forbearance are going to end up defaulting when the balloon payment for the forbearance comes due and they cannot refinance because home values have fallen below their loan balance. Debt default is becoming a tsunami, worldwide, and it is going to cause deflation on a scale most people can not even imagine.

Sequoia
Sequoia
6 years ago

Interesting my comment looks different when it submits.

Sequoia
Sequoia
6 years ago

This will end up making the last housing crisis look like a walk in the park. Why it is different this time.
1)The illegals will self deport. All the construction, hotel maid jobs, restaurant and gig jobs are gone. Which will hurt apartments and housing.

2)Everybody everywhere is just as broke as we are. There will be no Chinese or Russian billionaires laundering money through housing.

  1. The baby boomers are downsizing either to condos, nursing homes or coffins.

  2. Food is about to get extremely expensive and scarce as a Little Ice Age from the Eddy Grand Solar Minimum kicks in.

  3. This bubble is just too big and we are just too broke. The FED will eventually protect the dollar, over stawks and used homes. What good are high valuations in a dead currency?

Stuki
Stuki
6 years ago
Reply to  Sequoia

“The baby boomers are downsizing either to condos”

Condos are not pandemic friendly.

“Food is about to get extremely expensive and scarce”

Fat chance. At least in the US. WRT food safety, we really are about as great compared to other countries, as Trump claims we are.

We are broke, in fact too broke to afford as much oils as before. And way to broke to run around like idiots pretending $50K shacks are somehow magically “worth” $1 million. But not too broke to afford food. Nor to have roofs over our heads, if we were only free enough to be allowed to.

Maximus_Minimus
Maximus_Minimus
6 years ago

Is it possible that most of those 6% wouldn’t even be originated in a free market system where losses aren’t socialized through GSEs?

Six000mileyear
Six000mileyear
6 years ago

How does the mortgage delinquency / default / forebearance numbers compare to those leading up to the Great Recession?

gregggg
gregggg
6 years ago

6% this early in the game tells me these people opting for forebearence were in trouble long before COVID 19.

Stuki
Stuki
6 years ago
Reply to  gregggg

Which, considering the utter economic destruction which have been wrought, with increasing severity, over the past 5 decades or more by keeping the mortgage bubble afloat; means that, at least wrt this specific issue, the lockdowns are a good thing even absent a pandemic to excuse it.

gregggg
gregggg
6 years ago

Covid 19 News conference from New York

tokidoki
tokidoki
6 years ago
Reply to  gregggg

He’s basically pooh poohing the idea of asymptomatic carriers i.e. they don’t exist. There’s only the healthy and the sick.

“Do we need to test?” This guy’s not getting the memo that it’s hard to get tests.

Alyoshak
Alyoshak
6 years ago
Reply to  tokidoki

Lol! You’re the one not getting the memo. Here’s a medical professional, trained, experienced and on the front lines explaining the situation to you. Might do well to listen to him.

tokidoki
tokidoki
6 years ago
Reply to  Alyoshak

Dude, I can find another medical professional that says otherwise. How about all those nurses who confronted the coviprotesters?

This is the US we are talking about, I can always find people who believe all sorts of stuff including unicorns.

gregggg
gregggg
6 years ago
Reply to  tokidoki

You can quarantine. Nobody is stopping you. My wife and I are at greater risk than 99.9% of the rest of the population so we have armed ourselves with the necessary information to assess the risk.

Blurtman
Blurtman
6 years ago
Reply to  gregggg

Five key facts are being ignored by those calling for continuing the near-total lockdown.

Fact 1: The overwhelming majority of people do not have any significant risk of dying from COVID-19.

The recent Stanford University antibody study now estimates that the fatality rate if infected is likely 0.1 to 0.2 percent, a risk far lower than previous World Health Organization estimates that were 20 to 30 times higher and that motivated isolation policies.

In New York City, an epicenter of the pandemic with more than one-third of all U.S. deaths, the rate of death for people 18 to 45 years old is 0.01 percent, or 11 per 100,000 in the population. On the other hand, people aged 75 and over have a death rate 80 times that. For people under 18 years old, the rate of death is zero per 100,000.

Of all fatal cases in New York state, two-thirds were in patients over 70 years of age; more than 95 percent were over 50 years of age; and about 90 percent of all fatal cases had an underlying illness. Of 6,570 confirmed COVID-19 deaths fully investigated for underlying conditions to date, 6,520, or 99.2 percent, had an underlying illness. If you do not already have an underlying chronic condition, your chances of dying are small, regardless of age. And young adults and children in normal health have almost no risk of any serious illness from COVID-19.

Fact 2: Protecting older, at-risk people eliminates hospital overcrowding.

We can learn about hospital utilization from data from New York City, the hotbed of COVID-19 with more than 34,600 hospitalizations to date. For those under 18 years of age, hospitalization from the virus is 0.01 percent per 100,000 people; for those 18 to 44 years old, hospitalization is 0.1 percent per 100,000. Even for people ages 65 to 74, only 1.7 percent were hospitalized. Of 4,103 confirmed COVID-19 patients with symptoms bad enough to seek medical care, Dr. Leora Horwitz of NYU Medical Center concluded “age is far and away the strongest risk factor for hospitalization.” Even early WHO reports noted that 80 percent of all cases were mild, and more recent studies show a far more widespread rate of infection and lower rate of serious illness. Half of all people testing positive for infection have no symptoms at all. The vast majority of younger, otherwise healthy people do not need significant medical care if they catch this infection.

Fact 3: Vital population immunity is prevented by total isolation policies, prolonging the problem.

We know from decades of medical science that infection itself allows people to generate an immune response — antibodies — so that the infection is controlled throughout the population by “herd immunity.” Indeed, that is the main purpose of widespread immunization in other viral diseases — to assist with population immunity. In this virus, we know that medical care is not even necessary for the vast majority of people who are infected. It is so mild that half of infected people are asymptomatic, shown in early data from the Diamond Princess ship, and then in Iceland and Italy. That has been falsely portrayed as a problem requiring mass isolation. In fact, infected people without severe illness are the immediately available vehicle for establishing widespread immunity. By transmitting the virus to others in the low-risk group who then generate antibodies, they block the network of pathways toward the most vulnerable people, ultimately ending the threat. Extending whole-population isolation would directly prevent that widespread immunity from developing.

Fact 4: People are dying because other medical care is not getting done due to hypothetical projections.

Critical health care for millions of Americans is being ignored and people are dying to accommodate “potential” COVID-19 patients and for fear of spreading the disease. Most states and many hospitals abruptly stopped “nonessential” procedures and surgery. That prevented diagnoses of life-threatening diseases, like cancer screening, biopsies of tumors now undiscovered and potentially deadly brain aneurysms. Treatments, including emergency care, for the most serious illnesses were also missed. Cancer patients deferred chemotherapy. An estimated 80 percent of brain surgery cases were skipped. Acute stroke and heart attack patients missed their only chances for treatment, some dying and many now facing permanent disability.

Fact 5: We have a clearly defined population at risk who can be protected with targeted measures.

The overwhelming evidence all over the world consistently shows that a clearly defined group — older people and others with underlying conditions — is more likely to have a serious illness requiring hospitalization and more likely to die from COVID-19. Knowing that, it is a commonsense, achievable goal to target isolation policy to that group, including strictly monitoring those who interact with them. Nursing home residents, the highest risk, should be the most straightforward to systematically protect from infected people, given that they already live in confined places with highly restricted entry.

The appropriate policy, based on fundamental biology and the evidence already in hand, is to institute a more focused strategy like some outlined in the first place: Strictly protect the known vulnerable, self-isolate the mildly sick and open most workplaces and small businesses with some prudent large-group precautions. This would allow the essential socializing to generate immunity among those with minimal risk of serious consequence, while saving lives, preventing overcrowding of hospitals and limiting the enormous harms compounded by continued total isolation. Let’s stop underemphasizing empirical evidence while instead doubling down on hypothetical models. Facts matter.

Scott W. Atlas, MD, is the David and Joan Traitel Senior Fellow at Stanford University’s Hoover Institution and the former chief of neuroradiology at Stanford University Medical Center.

MATHGAME
MATHGAME
6 years ago
Reply to  Blurtman

The Stanford University study has been retracted … the other CA studies are just as flawed … try to keep up.

Neither you nor anyone else has any clear idea about the prevalence or duration of so-called “herd immunity” when it comes to SARS-COV-2 … stop pretending you know how it will pan out.

I agree with the 2nd and 5th points in terms of protecting the most vulnerable but your continued blather about “herd immunity” is specious.

I have no reason to doubt or believe the 4th point as all you did was present assertions, not referenced facts. It certainly has a logic to it but no specifics.

numike
numike
6 years ago
Reply to  gregggg

Coronavirus is spreading fast in states that may reopen soon, study finds https://www.cbsnews.com/news/coronavirus-spread-states-reopening/?ftag=CNM-00-10aab6a&linkId=87288486

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