As forbearance exits yet again hit an expected mid-month slowdown, resulting in an increase in active plans, according to Black Knight’s blog, Vision.
Active forbearance plans rose by 36,000 (4.6%) this past week, driven primarily by a 9.6%, 25,000, increase in FHA/VA plans. Forborne loans held by portfolios and PSL rose by 8,000 (3.2%) while GSE plans rose by 3,000 (1%).
The headline is ominous coming a week after new plan starts reached their highest level since an unexpected jump in December. However, new plan starts actually fell by 3% week-over-week. Restart activity paired with an exit “lull” pushed plan entries up.
The majority of homeowners in Covid-19 related forbearance have exited their plans as the economy continues its slow recovery from the effects of the pandemic.
“It is likely that the remaining borrowers in forbearance have experienced either a permanent hardship that may require more complex loan workout solutions, or they have encountered a recent hardship for which they are now seeking relief,” Marina Walsh, MBA’s Vice President of Industry Analysis, recently said of forbearance rates.
Plan volumes remain below last month’s numbers, clocking in at 75,000 (-8%). An additional 130,000 plans are up for extension or removal in January, with over a third expected to expire.
The total number of mortgage holders in Covid-19 related forbearance is now 816,000, or 1.5% of all mortgages.
Here are some more highlights from the post:
- Share of FHA/VA loans in forbearance: 2.3% (+0.2%)
- Share of GSE loans: 1% (unchanged)
- Share of Portfolio-held and PSL: 2% (unchanged)