The number of loans in active forbearance have fallen another 10% since last Tuesday, adding to last week’s 11% drop, according to Black Knight’s blog, Vision. More than 450,000 homeowners have exited forbearance plans just in the last two weeks.
Forbearances have fallen 22% over the last month, the fastest decline since the beginning of the pandemic. All investor classes have seen forbearances drop at least 20%.
The total number of mortgages in forbearances is down 143,000 this week. The largest drop was in loans held by PSLs and bank portfolios, which fell by 88,000, or 19%. GSEs and FHA/VA loans in forbearance both dropped by 6%.
Black Knight noted that this wave of exits was expected, as many plans were set to expire over the last few weeks. Expirations will continue to drive forbearance drops moving forward. “With some 47,000 September month-end expirations still left to process and another 329K scheduled for review for extension or removal in October, the potential for further, substantial declines will continue into early November,” the report reads.
The question industry observers are asking is how many of these borrowers will end up in foreclosure? The Mortgage Note has already reported on an uptick in filings, though the raw numbers remain low.
The total number of mortgage holders in Covid-19 related forbearance is now 1.25 million, or 2.4% of all mortgages.
Here are some more highlights from the post:
- Share of Fannie and Freddie loans in forbearance: 1.3% (-0.1%)
- Share of VA and FHA loans in forbearance: 4% (-0.3%)
- Share of GSE loans: 1.3% (-0.1%)
- Share of Portfolio-held and PSL: 3% (-0.6%)