Forbearances Hold Steady At Month-End

In its last weekly report, Black Knight found forbearances largely holding steady in a “typical” pattern for the end of the month.

Overall, forbearances rose by 2,300 plans last week. Loans held by portfolios and PSLs increased by 7,300 (+3.5%), though this was tempered by decreases for GSE loans (-1.2%, 2,400) and FHA/VA (-1.1%, 2,700).

Plan volume is down 54,700 (-7.3%) month-over-month. 

Some 78,000 plans are up for review in early May, the next time Black Knight expects to see significant improvement. One-third should expire. 

Overall, U.S. homeowners are in a good position to come out of forbearance strong. In January, delinquencies dropped to their lowest rate since at least January 1999 thanks to home price appreciation and the strong jobs market.

“The large rise in home prices…has built home equity and is an important factor in the continuing low level of foreclosures,” said Dr. Frank Nothaft, chief economist of CoreLogic. 

“Nonetheless, there are many homeowners that have faced financial hardships during the pandemic and are emerging from 18 months of forbearance. The U.S. may experience an uptick in distressed sales this year as some owners struggle to remain current after forbearance and loan modification.”

The total number of mortgage holders in Covid-19 related forbearance is now 691,000, or 1.3% of all mortgages. More than 92% of homeowners who entered forbearance have now exited those plans, leading Black Knight to retire this report after this week.

  • Share of FHA/VA loans in forbearance: 2%
  • Share of GSE loans: 0.7%
  • Share of Portfolio-held and PSL: 1.9%