The forbearance report from Black Knight's McDash Flash Forbearance Tracker showed the largest week-over-week decline in forbearance activity since early January. Active plans dropped by 77,000 overall in the week ending Tuesday, March 9.
As of that date, 2.6 million homeowners remained in forbearance, which represents 4.9% of all mortgagees. This also marks the first time the forbearance rate has dipped below 5% since early April 2020.
What's impacting the numbers? Black Knight's Andy Walden reports that the week's improvement was due to a combination of February month-end expirations as well as the proactive extension and/or removal of borrowers who were set to see their plans expire at the end of March.
While scheduled March month-end expirations are down from 1.1 million a week ago, there are still more than 800,000 plans currently listed with March expirations, Walden noted.
"This represents a daunting task for servicers as they review upcoming expirations for removal or extension based on recently revised HUD and FHFA's allowable terms of up to 18 months for early forbearance entrants."
The Federal Housing Finance Agency (FHFA) recently announced extensions of several measures that the agency says will align COVID-19 mortgage relief policies across the federal government. This announcement, which extends temporary measures (previously set to expire March 31) until the end of June follows the White House's February 16 moratoria extension applied to all federally backed mortgages through the same period.
Said measures include provisions for borrowers with Fannie Mae or Freddie Mac-backed mortgages who may be eligible for an additional three-month extension of COVID-19 forbearance, according to a press release. This additional three-month extension allows borrowers to be in forbearance for up to 18 months.
Early extension activity suggests servicers continue to approach forbearance plans in three-month increments, with the bulk of would-be March expirations being extended out through June (as it now stands), Black Knight reported.
Says Walden/Black Knight, "With more than 800,000 plans still listed with March month-end expirations we’ll be watching the numbers closely over the next few weeks for elevated levels of removal and extension activity."