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2 Million Forbearance Plans Set to Expire This Month

There was an improvement in the number of active forbearance plans this past week. The latest data from Black Knight shows that more than two million forbearance plans are set to expire in September.

That number is already down 350,000 to 1.7 million in the first full week of the month as those expirations begin to be assessed for extensions and removals.

After dropping by nearly 150,000 last week, the total number of mortgages in active forbearance declined another 66,000 (-2%) this week.

All in all, active forbearances are now down 238,000 (-6%) over the past 30 days, as servicers continue to proactively work their way through the wave of forbearance plans set to expire in September.

As of September 8, 3.7,000 homeowners remain in COVID-19-related forbearance plans. That’s down more than 22% from the peak of over 4.7,000 in late May.

These loans represent 7% of the active mortgage universe, down from 7.1% last week. Together, they represent $789 billion in unpaid principal.

Some 5% of all GSE-backed loans and 11.3% of all FHA/VA loans are currently in forbearance plans. Another 7.4% of loans in private label securities or banks’ portfolios are also in forbearance.

The week’s decline was primarily driven by GSE loans, which experienced a 36,000 decline in the number of active forbearance plans. FHA/VA loans saw a more modest weekly decline at -18,000. Active forbearances among loans held in private label securities or banks’ portfolios were down 12,000.

Portfolio-held loans actually saw the largest decline over the past 30 days, falling 13% month-to-month, though the 8% decline in GSE mortgages in active forbearance represented the largest volume. Forbearances among FHA/VA loans have improved by a much more modest -2% month-after-month, while private labeled security forbearances have risen by 2% over the past month.

While 75% of borrowers in forbearance have had their plans extended, new forbearance plan starts hit their lowest level in more than 5 months. A an estimated 48,000 plans were initiated in the first week of September, down 16% from the previous week and down 22% from the first week of August.

The ongoing COVID-19 pandemic continues to represent significant uncertainty for the weeks ahead. Black Knight will continue to monitor the situation and report our findings on this blog.

 

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others.
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