The number of active forbearance plans fell by 77,000 (-2.9%) this week, marking the largest weekly decline since early January 2021. This week’s decline was due to a combination of February month-end expirations as well as the proactive extension and removal of borrowers who were set to see their plans expire at the end of March.
As of March 9, 2.6 million homeowners remain in forbearance, marking the first time that the forbearance rate has fallen below 5% since early April 2020.
While month-end expirations scheduled for the end of March are down from 1.1 million a week ago, there are still more than 800,000 plans currently listed with March month-end expirations. This represents a daunting task for servicers: the need to review hundreds of thousands of upcoming expirations for removal or extension based on recently revised HUD and FHFA allowable terms of up to 18 months for early forbearance entrants.
Early extension activity suggests that servicers are continuing to approach forbearance plans in three-month increments, with the bulk of would-be March expirations being extended out through June.
With more than 800,000 plans still listed with March month-end expirations we’ll be watching the numbers closely over the next few weeks for elevated levels of removal and extension activity.