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Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Decreased

by Calculated Risk on 8/13/2021 09:23:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

This data is as of August 10th.

From Andy Walden at Black Knight: Another Week of Significant Forbearance Declines

In the wake of last week’s 71,000 drop over the first days of August, our McDash Flash daily mortgage performance dataset showed another significant decline in the number of active forbearance plans in the days since. The total number of active plans declined by 83,000 since last Tuesday, pushing the total number of homeowners in forbearance below 1.8 million for the first time since early in the pandemic.

As we’ve mentioned in the past, the largest movement in the number of forbearances tends to be seen early on in each month, as plans scheduled for three-month reviews in the month prior are reviewed for extension or removal.

As of August 10, 1.74 million homeowners remain in COVID-19-related forbearance plans, representing 3.3% of all active mortgages, including 1.9% of GSE, 5.8% of FHA/VA and 3.9% of loans held in bank portfolio and private securitizations.

Improvement was seen across the board. Portfolio and PLS loans saw the strongest reduction, with a 43,000 (-7.8%) decline in active plans. The number of FHA loans in forbearance fell by 25,000 (-3.5%) from the week prior, while GSE loans saw a 15,000 (-2.7%) decline. That puts the number of active plans down 125,000 (-6.7%) from the same time last month.

Black Knight ForbearanceClick on graph for larger image.

Plan starts, including both new plans and restarts, pulled back again this week, hitting their lowest weekly mark since early July (again). Of the 185,000 plans reviewed over the past week, 62% were exits.

More than 250,000 plans are currently slated for review for extension/removal throughout August. An estimated one-third of those are set to reach their final expiration based on current allowable forbearance term lengths. Volumes of final expirations will increase significantly in September and October.

emphasis added

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