Forbearance activity dropped below 2.6 million for the first time since last April, according to the latest report from Black Knight's McDash Flash Forbearance Tracker.
After the previous week’s largest weekly decline since early in January, the number of active forbearance plans fell again this week, Black Knight said in its report. Active plans fell by another 16,000 from the previous Tuesday as servicers continue to work through the large volume of scheduled end-of-month expirations.
Of the 1.2 million homeowners in forbearance whose plans were scheduled to expire at the end of this month, some 620,000 March-end expirations remain.
As of Tuesday (March 16) 2.59 million homeowners remain in forbearance, representing 4.9% of all homeowners with mortgages.
Say the researchers at Black Knight, "this week’s declines were driven by improvements among both GSE/(Fannie and Freddie) (-13,000) and FHA/VA plans (-8,000), while active plan volumes rose among portfolio-held/PLS mortgages."
"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," they noted.
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.
"With 620,000 plans still listed with March month-end expirations, we’ll be watching the numbers closely over the next few weeks as servicers continue to review upcoming expirations for removal or extension based on recently revised HUD and FHFAs allowable terms of up to 18 months for early forbearance entrants," Black Knight reported. "Extension/removal activity is worth keeping a close eye on through the final two weeks of the month and into early April, as these next weeks will be very telling re: what to expect in coming months."