After a “lull” last week hit the brakes on an early October tidal wave, forbearances held steady this week, according to Black Knight’s blog, Vision. Approximately 19,000 homeowners exited forbearance plans this week, slightly better than last week’s dismal 7,300.
Black Knight characterized last week’s slowdown as usual for the middle of the month and anticipates exits will accelerate this week as we move closer to month-end deadlines. This includes 140,000 plans facing final expiration.
The number of loans in forbearance fell across all categories, with a 3,300 drop in loans held by Portfolio and PSLs, 7,700 among FHA/Va loans, and 7,900 for GSE loans.
Notably, forbearance plan starts rose slightly last week, though they are still 28% lower from the same time the previous month. Forbearances reached their lowest point since May 2020 in October, despite analyst fears of an uptick after federal protections ended.
Foreclosures have spiked 34% in Q3, but the raw numbers remain low despite fears of a foreclosure tsunami as federal protections expire.
California, with a population of nearly 40 million people, had just 3,434 new foreclosures in Q3 — and that was the highest number in the nation. New York (population 20 million) had just 1,363.
“I think the ‘forbearance cliff’ will be minimal,” David Stevens, former CEO of the Mortgage Bankers Association and former FHA commissioner in the Obama administration, told CNBC.
The total number of mortgage holders in Covid-19 related forbearance is now 1.22 million, or 2.3% of all mortgages.
Here are some more highlights from the post:
- Share of Fannie and Freddie loans in forbearance: 1.3% (unchanged)
- Share of VA and FHA loans in forbearance: 3.8% (-0.1%)
- Share of GSE loans: 1.3% (unchanged)
- Share of Portfolio-held and PSL: 3% (unchanged)