September 28, 2021

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Mortgage News

Forbearance Snapshot: Mid-Month Activity Lulls, Exits Loom

In its weekly snapshot of forbearance activities, Black Knight reports an expected lull in activity towards the middle of the month. The number of active forbearance plans fell again this week, if only by 7,000 Tuesday through Tuesday. That is a total of 117,000 or -5.4% fewer than at the same point in time last month.

As of June 20, 2.06 million borrowers remain in COVID-19 related moratorium plans. Broken down by loan type, 2.3% of the loans secured by Fannie Mae and Freddie Mac are in deferral plans; 6.9% of the Federal Housing Administration (FHA) and VA-covered loans are enrolled in forbearance programs; and 4.5% of the portfolios / privately securitized mortgage loans remain in such plans.

While Fannie and Freddie and FHA / VA loans improved at rates of -6,000 and -4,000, respectively, deferral personal / portfolio mortgages rose by about 3,000.

Both starts and exits decreased during the week and distances decreased 50% from the previous week, which according to Black Knight researchers is typical mid-month behavior and end-of-month review cycles.

The influx of new plans was near the lowest weekly rate since the coronavirus pandemic began when Black Knight began pursuing COVID-19-related forbearances and continuing the trend of gradual decline in startup activity, the researchers report.

These experts expect the exits to increase even more towards the end of the month and beginning of July.

Around 400,000 plans are scheduled for quarterly review over the next three weeks. This could lead to additional plan exits as the July 4th holidays approach. And, added the authors of Black Knight’s latest report, “What happens in early July will largely dictate the outlook for later this year.”

As the service industry prepares for further exits from forbearance, DS news facilitated a webinar in which key players discussed their approaches and offers for homeowners.

The panelists emphasized that communicating with borrowers and keeping them in their homes is a top priority today. They named possible options such as the stand-alone partial claim, the owner-occupant modification, the combined partial claim and loan modification, and the FHA Home Affordable Modification Program.

“A big misunderstanding for those out of the industry and I handle these customer calls on a weekly basis. They think that in today’s environment the servicer is out to foreclose and get their property back, ”Ramie Word, SVP of Default Servicing for Cooper said,“ We ​​know this is not the environment we are in. The The top priority is keeping the customer in-house. The ability to work with the GSEs and CFPB speaks volumes about the differences between the financial crisis of 10-12 years ago to where we are now. We can have a dialogue and respond get to gray area issues, so we all go the same way together. “