Pandemic milestone: patient loans of less than 2 million



In the last several weekly abstinence reports from the Black Knight, which has tracked COVID-related abstinence activity since the pandemic began, researchers predicted a “bigger improvement” this week as 218,000 plans were reviewed quarterly at the end of June. (They also said what happens in early July “will largely determine the prospects for the end of this year”).

“Well, there has been a lot of improvement this week,” said Andy Walden, who writes the weekly Black Knight tolerance reports.

He says the total number of active plans fell 189,000 from Tuesday through Tuesday, bringing the number of homeowners registered for abstinence to 2 million for the first time since spring 2020.

The number of launches on the abstinence plan has also dropped again this week, with both new and re-launches dropping to a new pandemic-era low of less than 26,000, Black Knight reports.

For all types of loans, 1.8 million borrowers in total are participating in COVID-19 abstinence plans.

Loans of all classes of investors have reduced their share of forced borrowers.

Loans held in bank portfolios and private label securities cut recovery plans by 78,000. FHA and VA abstinence fell by 67,000 and the number of government-funded agencies fell by 44,000.

Nearly two-thirds of plans reviewed for renewals or deletions resulted in exits, which means the highest weekly churn in over six months and the highest weekly deletion volume since the first wave of plans went through a 12-month review a few months ago. reports Black Knight.

On a monthly basis, overall activity was down 254,000 or 12% from the same period last month.

As of Tuesday, about 1.86 million homeowners remain in these COVID abstinence plans, accounting for 2.2% of GSE loans, 6.8% of FHA loans and 4.6% of private and portfolio loans.

An additional 400,000 plans are slated to be renewed or removed next month.

In the print issue of this month’s magazine DS News, CEO of Fintech company EarnUp Nadim Khomsani outlined technology advice for service personnel to help borrowers get out of abstinence plans.

“Homeowners who remain patient are likely to face ongoing challenges such as job loss, declining income, and other hurdles associated with the pandemic … [by] expiration of extended unemployment benefits and a moratorium on alienation of property, he wrote. “As a result, when the next group meets their abstinence deadlines, they may struggle with loan repayments more than their predecessors.

He recommends four different repayment options depending on “the wide range of lenders’ policies, the financial condition of the borrowers, and the staff’s own ability to service each loan.”

The Consumer Financial Protection Bureau recently released new rules for a default service aimed at creating a “meaningful opportunity to implement loss mitigation options” in the mortgage industry.


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