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Forbearance Exits Hit Expected Month-end Lull

Forbearance Exits Hit Expected Month-end Lull

Following an established monthly pattern we’ve seen throughout the pandemic’s economic recovery, forbearance plan exits slowed mid-month, allowing overall plan volumes to edge higher.

According to our McDash Flash daily forbearance tracking dataset, the number of active forbearance plans increased 36,000 (4.6%) since last Tuesday. The week’s rise was driven primarily by restart activity, with new start activity actually down another 3% week-over-week.

 

FHA/VA plans increased by 25,000 (9.6%), followed by an 8,000 (3.2%) increase in plans among loans held in bank portfolios and private-label securities (PLS) plans and a 3,000 (1%) rise among GSE loans.

As of January 18, 816,000 homeowners remain in COVID-19-related forbearance plans, representing 1.5% of all active mortgages. The group includes 1% of GSE, 2.3% of FHA/VA and 2.0% of portfolio held and privately securitized loans.

 

Overall, plan volumes are down 75,000 (-8%) from the same time last month as borrowers continue to reach the end of their allotted forbearance terms.

Modest opportunity for additional improvement remains as we head into February, with more than 130,000 plans still marked for January month-end reviews for extension/removal. Just over a third of this group is expected to reach their final expirations at the end of the month.

We will continue to monitor the very latest forbearance data from the McDash Flash dataset and report our findings each week on this blog.