After a two week stretch of – not unexpected – slight increases in the number of active forbearance plans, our weekly snapshot of daily tracking data showed a partial reversal through Tuesday, December 1, continuing the “stairstep” nature of the recovery we’ve come to expect over the last several months. Over the past seven days, the number of active forbearances saw a modest decline of 39,000, countering more than two thirds of the 57,000 increase over the two weeks prior. The decline was likely drivenby a portion of the roughly 200,000 expirations that were scheduled for the end of November.
Improvement was mixed across investor classes, with GSE forbearances falling by 25,000 and FHA/VA forbearances falling by 14,000. On the other hand, the number of active forbearances among loans held in banks’ portfolios or private label securities held steady this week.Overall, forbearances are now down by 91,000 (-3.2%) month-over-month. While November saw comparatively limited forbearance expiration activity, more than 1 million forbearance plans are scheduled to expire in December, representing nearly 40% of all active forbearance cases
In total, as of December 1, 2.76 million homeowners remain in active forbearance plans. Together, representing approximately 5.2% of all active mortgages – down from 5.3% from last week – they account for approximately $561 billion in unpaid principal.
Of the 2.76 million loans still in active forbearance, 81% have had their terms extended at some point since March.
Of course, COVID-19 cases continue to spike nationwide, and unemployment claims have risen in recent weeks. As such, we will keep a close eye on the possibility of increasing forbearance starts over the coming weeks. Black Knight will continue to monitor the situation and report our findings on this blog.