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Active Forbearance Numbers Continue To Drop

As the market expected, the number of active forbearance cases significantly decreased for the second week in a row as the first wave of final plan expirations continues. 

According to Black Knight’s McDash Flash daily forebarance tracking dataset, active plans fell by another 10%, for an overall reduction of 143,000 since last Tuesdayon top of last week’s 177,000 (-11%) drop.  

For yet another week, the declines were seen across all investor classes, led by an 88,000 (-19%) plan drop among loans held in bank portfolios and private label securities (PLS). The number of homeowners in GSE and FHA/VA loans in forbearance saw matching 6% declines, for 22,000 and 33,000 reductions respectively. 

 

As of October 12, 1.25 million mortgage holders remain in COVID-19 related forbearance plans, representing 2.4% of all active mortgages, including 1.3% of GSE, 4% of FHA/VA and 3% of portfolio-held and privately securitized loans. 

The numbers of active forbearances has dramatically dropped in the last two weeks. Overall, forbearances are down 22% (359,000) in the last month, representing the fastest rate of improvement since the start of the pandemic. Declines of at least 20% have been seen across all investor classes with FHA/VA loans dropping 25% (-160,000); GSE dropped by 21% (-101,000); and Portfolio/PLS dropped by 20% (--98,000).  

 

Even better, more than 450,000 loans have exited forbearance in the last two weeks as their plans expired. Another 329,000 plans are scheduled for extension or removal in October leading the potential for additional declines to continue until November.  

A full copy of the findings can be found here on Black Knight’s website. 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at kyle.horst@thefivestar.com.
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