New data from our McDash Flash Forbearance Tracker shows that the end of the month brought about an expected reduction of 45,000 (-1.6%) active forbearance plans, driven by month-end expirations. Servicers still have an additional 47,000 plans with Jan. 31 expiration dates on their books, which opens up the potential for additional modest declines in volumes over the next few days as these plans are reviewed for extension/removal.
Declines were seen across investor classes this week, with the largest decline coming from FHA/VA forbearances (23,000/-2%), followed by a decline of 12,000 (-1.3%) in GSE forbearance plans and 10,000 (-1.4%) in portfolio-held and privately securitized loans. Despite the strong weekly improvement, however, overall forbearance improvement continues to be limited, with total volumes only down 42,000 (-1.5%) from last month.
As of Feb. 2, there are now 2.72 million homeowners in active COVID-19-related forbearance plans. This is 5.1% of all U.S. mortgage-holders. While this is the lowest such volume of forbearances seen since late April, volumes have been stuck in the 2.72-2.81 million range since early November. As we move toward the middle of February, it will be worth focusing on the trend of mid-and late month increases in active forbearance plans.
Looking ahead to February’s month-end, some 390,000 plans are set to expire, representing one (and potentially the last) moderate opportunity for improvement in forbearance volumes before the first wave of plans is set to reach their 12-month expiration at the end of March. At Black Knight, we will be especially interested in what the next couple months bring as far as forbearance-related recovery and will continue to closely monitor the data.