Of single-family homeowners who entered Covid-19 related forbearance, 89% have now exited their plans.
Active forbearance plans dropped by 43,000 (-8%) in the first week of January, according to Black Knight’s blog, Vision.
The number of loans in forbearance fell across all categories, led by a 22,000 (-8%) drop in forborne loans held by portfolios and PSLs. Forbearances on FHA/VA loans fell by 17,000 (-16%) and GSE loans fell by 4,000 (-1.6%).
The number of active plans is down 100,000 (-12%) from last month. An additional 155,000 plans are up for extension or removal in January. However, less than a third are expected to expire, meaning exit volumes will lessen moving forward.
New plan starts rose again, reaching their highest level since the first week of December when they experienced an unexpected jump. However, the 4-week moving average is down 9% month-over-month.
Most homeowners who have exited forbearance are up to date on their payments and not at risk of foreclosure. Filings are returning slowly, and 2022 should see a moderate climb back to normal levels, according to Rick Sharga, executive vice president at RealtyTrac, an ATTOM company.
“Government and mortgage industry efforts have prevented millions of unnecessary foreclosures, and while it’s likely that we’ll see a slight increase in the first quarter, we probably won’t see foreclosure activity back to normal levels before the end of 2022,” he said.
Sharga also expects repossessions to remain low in 2022 due to the record-breaking levels of equity homeowners currently possess. More than 87% of homeowners in foreclosure have positive equity.
The total number of mortgage holders in Covid-19 related forbearance is now 780,000 million, or 1.5% of all mortgages.
Here are some more highlights from the post:
- Share of FHA/VA loans in forbearance: 2.1% (-0.2%)
- Share of GSE loans: 1% (unchanged)
- Share of Portfolio-held and PSL: 2% (-0.1%)