Two-thirds of the 7.1 million homeowners who were granted forbearance during the pandemic have already left. Most of this “bellwether” group have either resumed payment on their loans or paid them off.

The number of homeowners who are just one or two months behind on their mortgage payments continues to drop below pre-pandemic levels. But the question looming for housing markets is, what will happen to the 2.1 million homeowners who are either in foreclosure, or haven’t made a mortgage payment in more than three months?

The latest data from Black Knight shows that five times as many homeowners were seriously delinquent at the end of March as was the case before the pandemic, meaning they haven’t made a payment for 90 days or more.

Source: Black Knight Mortgage Monitor.

Many homeowners who were granted forbearance during the pandemic are scheduled to hit their 18-month program eligibility limit at the end of September. But it’s not looking like there will be a big wave of pandemic-induced foreclosures, at least not on the order of the downturn that followed the 2007-09 recession.

That’s because two-thirds of the 7.1 million homeowners who were granted forbearance during the pandemic have already left, and most of this “bellwether” group have either resumed payment on their loans or paid 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 are not enrolled in a loss mitigation plan and remain delinquent. Among that group, it’s worth nothing that 100,000 were already delinquent heading into the pandemic.

Source: Black Knight Mortgage Monitor.

“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,” Black Knight’s latest Mortgage Monitor report concludes.

The number of foreclosure starts was up 28 percent 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.

For context, at the height of the housing downturn that followed the Great Recession, Black Knight counted 292,308 foreclosure starts in January 2010 alone. The total number of homes in foreclosure during the downturn peaked a year later at 2.25 million, in January 2011.

Last month, just 217,000 homeowners who had been current on their mortgage became newly delinquent — the lowest of any month on record dating back to the turn of the century. That, combined with a spike in “cures” — 671,000 homeowners who had been delinquent got back on track making their payments — saw the national delinquency rate nearly a full percentage point in March, to 5.02 percent.

“Not only did March see the largest single-month improvement in delinquencies in 11 years, but all indications suggest more is yet to come,” said Black Knight’s Ben Graboske in a statement.

Source: Black Knight Mortgage Monitor.

Graboske said other key metrics pointing to a “robust recovery under way” include the fact that mortgage delinquencies usually tend to climb in April. But that’s not been the case this year. As of April 23, 91.6 percent of mortgage holders were current on their monthly payments, up from 91 percent in March and the largest share for any month during the pandemic.

“That said, while overall sentiment for an economic recovery in 2021 remains robust, mortgage performance is expected to run into seasonal headwinds for most of the remainder of the year, which could marginally dampen overall improvement rates. Black Knight will continue to monitor the situation as we move forward,” Graboske said.

With mortgage rates easing in recent weeks, 3.4 million homeowners regained the incentive to refinance. That favorable trend in rates also helped make homes more affordable.

Source: Black Knight Mortgage Monitor.

Email Matt Carter

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
The best event in real estate kicks off next week! Tickets are selling quickly.Register Now×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription