Only 217,000 residential mortgage-holders became past-due in March, according to a new report from Black Knight, the lowest on record. At the same time, a wave of homeowners between 30 and 60 days behind on their loans became current, sending delinquency rates tumbling.
The number of loans 30 days past due fell 34 percent from February and 50 percent from the same time last year to hit an all-time low, Black Knight said, with 60-day delinquencies below pre-pandemic levels and near record lows as well.
The changes happened in the same month millions of Americans received $1,400 checks from the federal government as part of President Joe Biden’s American Rescue Plan COVID-19 relief package, signed by the president on March 11.
“Not only did March see the largest single-month improvement in delinquencies in 11 years, but all indications suggest more is yet to come,” Black Knight President Ben Graboske said in a statement. “As many early forbearance plan adopters shifted to post-forbearance waterfalls to get back to performing on their mortgage payments, inflow has continued to steadily improve as well. And, of the 7.1 million homeowners who have been in COVID-19 forbearance at one point or another, performance among those who have left plans has generally been strong.”
Through April 23, 91.6 percent of mortgage holders had made their mortgage payments, Black Knight said, up from 91 percent in March and the largest share for any month since the onset of the pandemic.
In Massachusetts, 4.1 percent of mortgages in the state were delinquent in March, a 28.6 percent jump from March 2020, with another 4.4 non-current, Black Knight said.
The Mortgage Bankers Association reported a similar trend in its latest forbearance report, but noted the rate of homeowners exiting forbearance appears to be slowing.
The total number of loans in active forbearance plans dropped 2 percent, it said, from 4.49 percent to 4.47 percent, putting about 2.23 million Americans in active forbearance plans.
“The share of loans in forbearance decreased for the ninth straight week, dropping by 2 basis points. The rate of exits has slowed the past two weeks, with this week’s exit rate reaching the lowest since February,” Senior Vice President and Chief Economist Mike Fratantoni said in a statement. “The increase in the forbearance share for portfolio and PLS loans highlights both the ongoing buyouts of delinquent loans from Ginnie Mae pools as well as an increased forbearance share for other loans that are not federally backed.”
Nonetheless, Fratantoni said strong job market and housing market data make him believe “many” homeowners will find support to exit forbearance plans in the months ahead.
The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 points to 2.42 percent. Ginnie Mae loans in forbearance decreased 7 basis points to 6.02 percent, while the forbearance share for portfolio loans and private-label securities increased by 13 basis points to 8.55 percent. The percentage of loans in forbearance for independent mortgage bank servicers decreased 2 basis points to 4.7 percent, and the percentage of loans in forbearance for depository servicers also declined 2 basis points to 4.62 percent.
