Forbearances Fall Heading Into February

Active forbearance plans fell by 45,000 plans (-5%) last week, according to Black Knight’s blog, Vision.

GSE plans fell by 24,000 (-9%), while forborne loans held by portfolios and PSL dropped 12,000 (4%). FHA/VA loans in forbearance fell by 3%, or 10,000 plans.

New plan starts and restarts also decreased after weeks of climbing.

In a recent webinar, RealtyTrac EVP Rick Sharga and Mortgage Policy Advisors Managing Director and Five Star Global Chairman Ed Delgado predicted 2022 would look much like 2021, with low rates of new forbearance plans and serious delinquencies.

“The presumption at the start of the pandemic was that there was going to be this gradual swelling of foreclosures, as forbearances expired and consumers had nowhere to go,” said Delgado. This narrative never played out.

“I look to the low number of new delinquencies, as being very positive,” Sharga added. “It speaks to the quality of loans entering and exiting the system.”

Plan volumes are down 58,000 (-7%) month-over-month. Some 50,000 plans are still slated for January extension or removal, with 15,000 expected to expire. However, Black Knight notes that since so many homeowners have already exited forbearance, “plan exits are on a slowly decelerating track heading into February.”

The total number of mortgage holders in Covid-19 related forbearance is now 790,000, or 1.5% of all mortgages. More than 90% of single-family homeowners who entered Covid-related forbearance have now exited their plans.

  • Share of FHA/VA loans in forbearance: 2.3% (-0.1%)
  • Share of GSE loans: 0.9% (-0.1%)
  • Share of Portfolio-held and PSL: 2.0% (-0.1%)