As expected, we saw another significant drop in the number of active forbearances this week, as the first wave of final plan expirations continues.
According to our McDash Flash daily forbearance tracking dataset, active plans fell by another 10%, for an overall reduction of 143,000 since last Tuesday – on top of last week’s 177,000 (-11%) drop.
Once again, 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. 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.
More than 450,000 homeowners have exited their forbearance plans over the past two weeks alone. With some 47,000 September month-end expirations still left to process and another 329K scheduled for review for extension or removal in October, the potential for further, substantial declines will continue into early November.
Overall, forbearances are now down 359,000 (-22%) over the past 30 days, representing the fastest rate of improvement since the start of the pandemic. Declines of at least 20% have been seen across all investor classes over that same period:
- FHA/VA: -160,000 (-25%)
- GSE: -101,000 (-21%)
- Portfolio/PLS: -98,000 (-20%)
We will continue to monitor the very latest forbearance data from the McDash Flash dataset and report our findings each week on this blog.