September 19, 2021

MP Now News

Mortgage News

Though Millions Remain in Forbearance, Numbers Are Decreasing

A week ago, for the first time since last April, we saw a decline in forbearance activity below 2.6 million McDash Flash Forbearance Tracker from Black Knight, and the decline continues this week.

Active plans fell again this week, falling another 19,000 (-0.7%) from the previous Tuesday. Overall, this means that the number of active plans has decreased by 135,000 in the last month, which is a reduction of 5%.

The monthly decline is the healthiest rate of improvement since late last November.

Black Knight researchers say this is a direct result of service reps who went through the 1.2 million plans completed this month with scheduled expiration times for renewal and / or removal in March.

They point out that despite this strong monthly improvement, there are still more than 46,000 active plans by the end of the month of March, which offers the potential for additional improvements in the coming weeks.

Through March 23, 2.57 million homeowners remain indulgent, representing 4.9% of all homeowners with mortgages.

By type of loan:

The week’s improvement was due to declines in Fannie Mae / Freddie Mac-backed loans of -21,000 and FHA / VA plans which fell by 10,000. However, activity in portfolio / PLS mortgages increased by 12,000.

“Early renewal activities indicate that service technicians are continuing to move closer to the forbearance plans in three-month increments, with the majority of possible expiration times extending from March to June,” reported BK. “Plan extensions made up 75% of all renewal / removal activity in the past few weeks, but the distances have simply increased due to the volume of expiration planned for this month.”

The Federal Housing Finance Agency (FHFA) recently announced the expansion of several measures that the agency says will align COVID-19 mortgage relief guidelines across the federal government. This announcement, which extends temporary measures (which should expire by March 31st) to the end of June, follows the Extension of the moratorium on February 16 in the White House applies to all government-guaranteed mortgages for the same period.

These measures include provisions for borrowers on Fannie Mae or Freddie Mac mortgages who may be eligible for an additional three-month COVID-19 Forbearance Extension. according to a press release. This additional three month extension allows borrowers to stay in forbearance for up to 18 months. Black Knight notes that this includes the majority of the possible March expiration times.

Finally, the McDash Flash Payment Tracker shows that 90.7% of the borrowers tracked had made their payment by March 22nd, up from 89.8% by the same time in February.

You can find the full weekly forbearance reports here Black Knights Blog.