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The number of borrowers in coronavirus-related mortgage relief programs fell for the second straight week, as cities began to reopen and some Americans went back to work.
There are 4.66 million borrowers in government or private-sector forbearance programs, representing 8.8% of all active mortgages, according to Black Knight, a mortgage technology and data provider.
These programs allow borrowers to delay their monthly payments for at least 3 months and potentially as much as a year.
The numbers are down by 77,000 from last week and down by 112,000 since the peak the week of May 22. Loans backed by Fannie Mae and Freddie Mac saw the greatest decline in volume, with forbearances down by 47,000 week-over-week, but all investor classes saw reductions.
“After watching forbearance rates rise week after week since late March, it’s undoubtedly encouraging to see the number of homeowners in such plans decline for the second consecutive week,” said Andy Walden, director of market research for Black Knight.
“That said, with 4.6 million remaining in forbearance, there is still significant work ahead,” he added. “With volumes seemingly cresting, the focus now shifts to helping those homeowners who remain in forbearance get back on track financially.”
While borrowers can delay their payments, mortgage servicers still must advance those payments to bondholders for a maximum of four months.
At today’s levels, servicers of Fannie and Freddie loans will need to remit up to $8.8 billion in advances over that four-month period.
Borrowers have the option to make up their missed payments when they sell their homes or refinance their mortgages.