The number of loans in forbearance remained basically the same leading up to Thanksgiving, making up 1.9% of all active mortgages, according to Black Knight’s blog, Vision.
Black Knight characterized this week as “holding true to the established mid-month pattern,” referring to a months-long trend of forbearance slowdown in the middle of the month, with substantial pushes in the first and final weeks.
The number of active forbearance plans rose by 1,000. FHA/VA loans dropped by 4,000 but this was offset by an increase of 5,000 among portfolio and PLS loans. GSE loans saw no change.
“Both plan extensions and renewals remained steady, but low, in keeping with the typical mid-month lull,” the blog reads.
But there was one surprising change: new plan starts increased by nearly 8,000 week-over-week, their first serious jump after a period of little movement since the end of March. Black Knight noted that starts will be closely watched in the coming weeks to determine if it is “an anomaly or an inflection point.”
Forbearance plans remain 18% lower than last month after a flood of exits in October and early November.
But research suggests those who are still in forbearance plans are the most vulnerable.
“The borrowers in the subprime credit score buckets are much, much more likely to have both entered forbearance, and still be in forbearance at this point,” Joelle Scally, a financial and economic analyst with the New York Fed, told CNBC.
The Biden administration has put $10 billion from its $1.9 trillion relief plan into a federal Homeowner Assistance Fund, which is intended to give homeowners financial help for broadly-defined “expenses.” The money will be distributed by state, territorial, and tribal governments.
“Time is of the essence because the foreclosures will be starting next year,” said Alys Cohen, a staff attorney with the National Consumer Law Center, regarding distribution of the funds.
The total number of mortgage holders in Covid-19 related forbearance is now 1.01 million.