After 9 Weeks of Steady Improvement, Forbearance Activity Rises

After about two months of steady improvement to the country's COVID-related mortgage forbearance activity, numbers have increased, according to the data analysts at Black Knight.

As of last Tuesday, 2.33 million, or 44% of homeowners, remain in COVID-related forbearance plans, including 2.6% of Fannie/Freddie loans; 7.8% of FHA/VA loans, and 5% of private and portfolio loans.

Upon reporting the latest numbers, which show a 20,000 rise in active forbearance plans, Black Knight's representatives report that the increase is not causing too much concern, and it is not entirely unexpected.

"These mid-month increases have been relatively common in recent months," they say.

Plus, despite this uptick, plan volumes are down 228,000 or -8.9% from the same time last month.

Both inflow and exit activity fell this month with exits hitting their lowest weekly total since late February, Black Knight reports.

The increase occurred primarily among portfolio and privately securitized mortgages, Black Knight reports, showing a 31,000 increase in forbearance plans for those types of loans this week.

The forbearance rate for government-backed loans continues to decrease.

Among Fannie Mae and Freddie Mac-backed loans, the number is down by 9,000. For Federal Housing Administration-backed and VA mortgage loans, the numbers dropped by 2,000.

We could see more month-over-month improvement with next week's statistics, which will include the last few days of April, according to Black Knight's researchers—more than 240,000 plans were set to expire in April, they say.

The Consumer Financial Protection Bureau (CFPB) recently proposed changes intended to help prevent impending foreclosure actions as the emergency federal foreclosure protections—forbearance programs—are eventually set to expire.

The CFPB reports that more homeowners are behind on their mortgages than at any time since 2010, the peak of the Great Recession. Nearly 1.7 million borrowers are scheduled to exit forbearance programs in September and the following months, with many a year or more behind on their mortgage payments.

Check back every Friday for a forbearance update from Black Knight.