The number of plans in active forbearance fell by 11,000 this week, according to Black Knight’s blog, Vision. That leaves 1.58 million homeowners in forbearances due to Covid-19.
The total number of mortgages in forbearances is now down 192,000 month-over-month, an 11% difference. This is the fastest rate of decline reported by Black Knight since July.
As early forbearance entrants reach their final expirations, even larger exit rates are expected. The blog notes that “the largest declines in forbearance volumes typically come during the first week of the month, as plans which expired in the prior month are deactivated in servicing systems of records.”
Forbearance exits are being closely watched by industry analysts as expiration dates for forbearance plans loom. A Zillow report estimated that 25% of homeowners exiting forbearance could end up selling rather than restarting payments, which could shock the market with new inventory.
“Hundreds of thousands of U.S. homeowners are expected to exit forbearance in coming months. A significant share of these homeowners will likely end up listing their home for sale, contributing meaningfully to overall inventory levels and allowing homeowners in forbearance to benefit from home price appreciation and use the equity gained for a future down payment,” the report said.
Here are some more highlights from the post:
- Share of Fannie and Freddie loans in forbearance: 1.6%
- Share of VA and FHA loans in forbearance: 5%
- Share of GSE loans: 1.7%
- Share of Portfolio-held and PSL: 3.8%