While the number of mortgages in forbearance saw some week-over-week improvement during the most recent reporting period, the overall trend is not good. Black Knight said there was a decline of 12,000 loans in active plans during the week ended December 8, driven almost entirely by an exodus from bank portfolios and private label securities (PLS). However, there was a monthly increase in the numbers for the first-time number of plans increased over the last month for the first time since mid-spring and first-time starts also rose.
The company reports that, as of last Tuesday there were 2.75 million active forbearance plans, 5.2 percent of the 53 million loans in servicer portfolios. These loans represent $558 billion in unpaid principal.
Forbearances among bank held and PLS loans now total 664,000 after a 13,000-loan decrease over the last week. This is 5.1 percent of those loans. There was also a drawdown of 2,000 loans serviced for the GSEs Fannie Mae and Freddie Mac. There are 965,000 of those loans remaining in plans, 3.5 percent of the total. The number of FHA and VA loans in forbearance increased during the week by 3,000, putting that total at 1,121,000 or 9.3 percent of the combined portfolios.
The volume of forborne loans is now up 21,000 over the last month. Black Knight says this increase is, in part, due to the limited expiration activity at the end of November which held down program removals at the beginning of December.
However, it is concerning that plan starts have begun trending upward again. There were more than 40,000 first-time entries into the program over the past week, the most since the beginning of September. In previous weeks most starts had been plan reentries. The company suggests that rising COVID-19 case rates and measures undertaken to try to control spread may be contributing to an increased need for forbearance assistance. New starts have risen 19 percent over the past two weeks, while overall starts (including restarts) are up 5 percent over the same period.