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How Many Mortgage Holders Are Still Utilizing Forbearance?

house, home, housing, residential

house, home, housing, residentialThe number of mortgages in forbearance moved up again this past week, making it the second week in a row of increasing activity, according to Black Knight, whose McDash Flash [1] Forbearance Tracker has been measuring weekly forbearance numbers since special COVID-19-related forbearance programs were put in place.

Speaking of which, FHFA this week announced [2] extensions of several measures that the agency says will align COVID-19 mortgage relief efforts across all of the federal agencies that are enacting them. That includes extended offerings of COVID-19-related forbearance.

Forbearance numbers, says Black Knight, climbed by 21,000, rising .08 since last Tuesday, making a total of 2.7 million mortgages in active forbearance. Earlier in February, the numbers actually dipped for the first time since April of last year, but this week's rise "continues the trend of mid-month increases we've grown accustomed to seeing since the recovery began," said Black Knight Data, Analytics, and Servicing reporter Andy Walden.

Despite that increase over the past two weeks, the monthly rate of decline remained even at -2%, continuing the trend of slow but steady improvement in the overall outstanding-forbearance statistics. "Remember," Walden pointed out, "monthly declines have been averaging less than 2% since early December.

At the end of this most recent reporting period, February 23, 2.7 million homeowners—that's 5.1% of all mortgage-holders—remain in active forbearance.

Broken down by types of loans, 9.3% of FHA/VA borrowers are utilizing forbearance, with 3.2% of Fannie Mae/Freddie Mac borrowers are doing so. For private and portfolio mortgage loans, about 5.2% of those borrowers are using the programs.

That said, portfolio-held and privately securitized loans saw the largest increase in plans (up 16,000 or 2.4%), followed by FHA/VA loans, which saw active forbearance plans rise by 7,000 or 0.6%. As was the case last week, GSE loans were the only cohort to see any sort of decline (down 2,000;-0.2%).

About 160,000 plans are set to expire at the end of this month, according to Black Knight.

As  EVP of Marketing at RealtyTrac Rick Sharga wrote in a February DS News feature [3], "The million-dollar questions that everyone in the industry is asking right now are: 'What are foreclosures going to look like once the foreclosure moratoria and forbearance programs come to end? And will we see all those borrowers in forbearance end up in default?'"

"The short answer," Sharga noted, "is 'there probably won’t be a foreclosure tsunami.' But mortgage servicers and other default servicing professionals should prepare themselves nonetheless.