There was a net decline of 1.6 percent in
the number of mortgages in forbearance during the past week, a decrease of approximately
48,000 loans, as more plans that had expired at the end of January were
processed out of the system. After the number of forborne loans declined by
45,000 the previous week, Black Knight had estimated there were about 47,000
more January expirations pending either removal or a three-month extension of
their forbearance term.
The company, in its weekly report on
COVID-19 forbearances, said the expirations driving the improvements over the
past two weeks are of three-month terms. The maximum 12-month period would have
begun to hit at the end of March. However, earlier this week the Federal
Housing Finance Agency (FHFA) announced that borrowers in Fannie Mae and
Freddie Mac (GSE) forbearance plans may be eligible for an additional extension
of up to three months.
As of February 9, 2.67 million homeowners
remained in forbearance, 5.0 percent of all mortgage-holders, and representing
$532 billion in unpaid principal. Black Knight says this is the first time the
number has dropped below 2.7 million since early April 2020.
There were declines across all investor
types, the largest among loans serviced for bank portfolios and private label securities
(PLS). A net of 30,000 loans, 4.4 percent of those loans left the program.
Loans serviced for the VA and FHA had a reduction of 30,000 active plans or 1.1
percent and the GSE portfolio improved by 6,000 or 0.7 percent. As of February 9, there were 907,000 GSE loans, 1.114 FHA/VA
loans, and 650,000 portfolio/PLS loans remaining in forbearance plans. These
represent 3.3, 9.2, and 5.0 percent of those respective portfolios.
Black Knight says that it bears
repeating that overall improvement in the number of active plans continues to
be limited. Monthly declines have been averaging less than 2.0 percent since
early December. The FHFA extension changes the landscape, of course, as roughly
30 percent of the remaining GSE forbearances had been set to expire at the end
of March. Should Ginnie Mae extend the
FHA and VA plans to a maximum of 15 months and the current rate of improvement continues,
there would still be some 2.5M homeowners in forbearance at the end of June
when the first round hit of loans hit the new deadline.