July 30, 2021

MP Now News

Mortgage News

More Than 2 Million Borrowers Remain in Forbearance Plans

as coronavirus continues to decline nationwide and the labor market and economy gradually return to pre-pandemic levels, the proportion of mortgage loans in active deferral continues to improve on a monthly basis, although there is a slight week-to-week increase in the middle of the month. This week is no different from several in the past, with the total forbearance rate showing a tiny increase from Tuesday to last Tuesday of about 1,000 by mid-month.

Overall, the number of forbearance plans was down 6% over the same period last month, reflecting a 5.4% increase in the monthly improvement rate in the previous week.

As of June 22, 2.06 million, or 3.9% of all mortgage holders remain in COVID-19-related moratorium plans.

Broken down by loan type, 2.3% of the loans secured by the government-sponsored Fannie Mae and Freddie Mac remain dumb. Of the Federal Housing Administration (FHA) and VA loans, 6.9% are still in default. And 4.6% of portfolio and private label securities loans are in forbearance plans.

GSE numbers fell by 10,000 for the week. FHA / VA forbearance plans fell 7,000 for the week, while PLS and portfolio mortgage loans rose 18,000.

Starts were down slightly for the week, averaging 7% below the previous four week period. Removals were also at their lowest level in five weeks, and lengthening activity also declined.

Black Knight analysts remind us that there are more than 300,000 quarterly review plans planned through next Wednesday, which could lead to further exits. “We should all expect more activity in one way or another as we approach July 4th,” they say. That builds on last week’s comment that “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 where key players discussed their approaches and offers for homeowners with Forborne loans.

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, ”panelist Ramie Word, SVP of Default Servicing for Mr. Cooper said during the webinar.

“We know this is not the environment we are in. The number one priority is keeping the customer indoors,” Ramie continued. “The opportunity to work with the GSEs and the CFPB speaks volumes about the differences between the financial crisis 10-12 years ago and where we are now. We are able to have a dialogue and get answers to gray area issues, so we’re all marching together the same way. “