Forbearances Plans Drop In First Week Of 2022

Active forbearance plans dropped by 73,000 (-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 30,000 plan decrease in FHA/VA loans (-10%). Forbearances on loans held by portfolios and PSLs fell by 17,000 (-8%) and GSE loans fell by 27,000 (-19%).

The number of active plans is down 123,000 (-13%) from last month. Additional declines are expected with 61,000 plans still listed as extension/removal in December 2021, of which 25,000 are expected to expire. An additional 186,000 plans are up for extension or removal in January, though less a third are expected to expire.

Forbearance plan starts ticked up once again, continuing a trend that Black Knight has said it will keep a close eye on. However, the 4-week moving average is down 8% month-over-month.

Though most homeowners who have exited forbearance are up to date on their payments and not at risk of foreclosure, some are still at risk.

In response to the number of homeowners who are still struggling, California this week implemented the nation’s biggest mortgage relief program. Eligible homeowners will receive a one-time grant of up to $80,000 per household.

“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 mortgage relief funds.

The total number of mortgage holders in Covid-19 related forbearance is now 824,000 million, or 1.6% of all mortgages.

Here are some more highlights from the post:

  • Share of Fannie and Freddie loans in forbearance: 1%
  • Share of VA and FHA loans in forbearance: 2.3%
  • Share of GSE loans: 1%
  • Share of Portfolio-held and PSL: 2.1%