The deleveraging of mortgage loans picked up speed last week, typically in the first week of each month. Black Knight says the number of plans has dropped by 71,000. with the sharpest decline in FHA and VA mortgages which fell by a total of 36,000 or 4.8 percent. GSE (Fannie Mae and Freddie Mac) loans fell 18,000, or 3.2 percent, and portfolio and private label securitized (PLS) loans fell 17,000, or 3.0 percent.
As of August 1st, the company estimates 1.82 million loans, or 3.4 percent of all active mortgages, will remain in COVID-19-related plans. These include 551,000 GSE loans or 2.0 percent of those portfolios, 721,000 FHA and VA loans (6.0 percent), and 551,000 portfolio / PLS loans (4.3 percent).
Although there were few cuts in mid-July, the number of active plans is down 131,000 from the beginning of the month. Black Knight said this was a slightly slower rate of improvement than it has been for the past few weeks. The slowdown is attributed to above-average declines in early July as the first wave of forbearance candidates went through their 15-month review process.
From the plans reviewed last week almost 60 percent left the program, 40 percent were extended for a further three months. That’s a decrease from an exit / renewal ratio of 65 to 35 at the same point in time last month. The plan starts, including new plans and restarts, were withdrawn this week, hitting their lowest weekly value since early July.
More than 340,000 plans are due for review this month. It is estimated that a third will reach its final expiration date based on the currently permitted deferral periods.