Black Knight reveals the number of active forbearance plans fell this last week, with more than 75% of loans that are currently in active forbearance facing extension plans.
Black Knight, Inc., a leading provider of integrated software, data and analytics solutions, has released the latest findings from the McDash Flash Forbearance Tracker.
Indicators point to good news regarding forbearances following a marked decline last week.
Specifically, the number of active forbearance plans fell an impressive 101,000 versus last week. Experts attribute this decline in great part to the estimated near half a million plans that were set to expire the last week of July.
According to the data, over 75% of loans that are currently in active forbearance had their plans extended. The majority of these extensions were for a time period of three more months, which has led to what experts have dubbed an "echo wave" of forbearance expirations.
In order to offer some insight for comparison of how things stood just one month ago, as June launched into its first week, there were almost 2.5 million plans that were due to expire within the next 30 days.
Now, when factoring in the usual extensions of three months, that means that there are currently 2.2 million plans which are set to expire come autumn (September). This will cause yet another influx, or “wave,” of forbearance extensions. As such, there is a high probability that removals may be seen as September ends and the market enters into the month of October.
Regarding the number of forbearances across investor classes during this past week, those declined in every niche, with the greatest decline being in GSE loans (both by volume and percentage)—the exact statistics of which were -56,0000 and 4%, respectively.
As for FHA/VA loans, these experienced their first dip in an entire month, plummeting by 32,000 (-2%). Fast on their heels were portfolio-held and private labeled security loans, which experienced a slightly smaller dip of 13,000 (-1%).
With new cases of COVID-19 still on the rise, coupled with the recent expiration of expanded unemployment benefits, uncertainty abounds.