After last week’s roughly 190,000 reduction in the number of active forbearance plans, a decline of just 1,000 plans may feel miniscule.
It may indeed be, but it’s also very much in line with what we’ve seen month after month since the recovery began – namely, the well-documented, mid-month lull in activity.
As of July 13, 1.86 million borrowers remain in COVID-19 forbearance plans, making up 3.5% of all active mortgages and 2.1% of GSE, 6.2% of FHA/VA and 4.0% of Portfolio/PLS loans.
What little weekly improvement was seen was found among FHA/VA forbearance plans (-5,000). This was partially offset by a 4,000 rise among portfolio/PLS forbearances while at the same time plan volumes among GSE loans held steady from last week.
All in, this puts the number of loans in active forbearance down 196,000 (-9.5%) from the same time last month. With nearly 400,000 plans still scheduled to be reviewed for extension/removal this month, there is still a chance for moderate recovery towards the end of this month and the beginning of August.
Removal volumes returned to mid-June levels as the number of loans being reviewed for extension/removal trailed off after the first week of the month, while plan starts edged higher, driven by an increase in restart activity.
This too is a familiar phenomenon; one we’ve seen following large volumes of quarterly plan reviews over the course of the pandemic. As in the past, the increase in restarts is most likely a counter to last week’s large number of exits.
We will continue to monitor the very latest forbearance data from the McDash Flash dataset and report our findings each week on this blog. For monthly deep dives into the matter, be sure to look for our Mortgage Monitor report on the first Monday of every month.