August 5, 2021

MP Now News

Mortgage News

Forbearance Levels Improve, But Plan-Expirations Loom Large

The level of indulgence looks better across the board as the volume decreases for all types of mortgage loans the Black Knight weekly report. In line with the strong trend of improvements at the beginning of the month, the total volume decreased by 61,000, or 2.7%.

Forbearance volumes for Fannie Mae and Freddie Mac declined 13,000, or -1.9%.

The Federal Housing Administration (FHA) and VA plan volume improved 19,000, or -2.1%.

Forbearance in private label securities (PLS) and portfolio loans declined 29,000, or 4.6%.

The inflow is also declining – “The total number of plan starts has fallen by 13% compared to the month and continues to decline slowly,” report the analysts from Black Knight.

So the current state of the COVID-related Forbearance Plans in America as of May 11th is as follows:

2.16 million or 4.1% of homeowners remain in pandemic-triggered forbearance plans, including 2.5% of Fannie / Freddie loans, 7.3% of FHA / VA loans, and 4.6% of Portfolio and PLS -Credit.

Around 250,000 plans have expiration dates for May 2021, says Black Knight, which “provides a moderate opportunity for additional improvement over the next few weeks, and more specifically in June, which lists 860,000 expiration or renewal processes. Of all loans, which have been checked for renewal. ” or removal last month, 38% removed out of indulgence, the highest removal rate since mid-February.

June marks the final quarterly review before early indulgent beginners hit their 18-month plan expiration times later this year.

President Joe Biden announced last February an extension of the moratorium on home foreclosures, which was previously due to expire on March 31, to the end of June. This temporary moratorium blocks home foreclosures, allows late mortgage payments, and offers six months extra mortgage leniency to those who enroll by June 30th.

Last week, in discussing the rapidly improving rate of delinquency and forbearanceMarina Walsh, VP of Industry Analysis for the Mortgage Bankers Association, attributed an improving employment situation. She also issued a warning to the servicers that leniency programs expire: “After long-term forbearance ends, some borrowers, regardless of their improving employment prospects, may require more complex training options, such as loan modifications, to stay in their homes.”