The country saw another week of forbearance increases this week, with volumes rising by another 16k (+0.73%). This marked the second consecutive week of increases after a sustained downward trend. Despite the raising volume, this is still only the third overall increase over the past 12 weeks. As of May 25, 2.2M (4.1% of) homeowners remain in COVID-19 related forbearance plans, including 2.4% of GSE, 7.3% of FHA/VA and 4.8% of portfolio/PLS loans.
After seeing improvement accelerate as early forbearance entrants went through the 12-month review process in March and April, exit activity has since returned to more “normal” levels. Mid- to late-month increases in forbearance plan volumes like we’ve seen in the past two weeks have been very common during the recovery to-date.
Plan starts hit their highest level in nine weeks, primarily driven by elevated levels of restart activity. while new plans starts still remain low, they edged slightly upward, hitting their highest level in nine weeks as well.
The 1k (-0.1%) weekly decline in forbearances among GSE loans was more than offset by a 2K (+0.2%) increase among FHA/VA loans and a 15k (+2.5%) increase among portfolio-held and privately securitized mortgages.
Nearly 145k plans are still listed with May 2021 expirations, providing a moderate opportunity for additional improvements over the next two weeks and, more acutely, in early June. Another 780k plans are currently slated for review for extension/removal in June, the final quarterly review before early forbearance entrants begin to reach their 18-month plan expirations later this year.
June will mark the 15-month review point for many of the early forbearance entrants, so we will be watching exit velocity closely during that time.