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Forbearances See Weekly Rise

Forbearances See Weekly Rise

After the last couple of weeks of volumes remaining flat, we did see some movement in the number of active forbearance plans this past week. According to our McDash Flash daily Forbearance Tracker data, the total number of active plans is up by 31,000 since last Tuesday.

Such upward movement late in the month has been relatively common in the recovery to date. Plan removals are clustered early in the month, which tends to lead to some degree of restart activity as the month progresses.

Despite this increase, there are still 163,000 (-7.9%) fewer plans than at the same time last month. As of July 27, 1.9 million borrowers remain in COVID-19 forbearance plans, making up 3.6% of all active mortgages and 2.0% of GSE, 6.3% of FHA/VA and 4.4% of Portfolio/PLS loans.

Forbearances rose most significantly among loans held in bank portfolios or private label securities – which were up 35,000 for the week – with FHA/VA mortgages seeing a slight uptick in plans as well (+1,000). The 5,000-plan decline among GSE loans offset just a small share of the total weekly rise.

There are still some 179,000 plans are still scheduled to be reviewed for extension/removal in July, which provides some substantial opportunity for improvement next week.

While still low, new forbearance plan starts hit their highest weekly level since late March, with restart activity also remaining elevated. Roughly 2/3 of all starts over the past week were restarts. Removal volumes were the lowest since late May given the low volume of review activity at this time of 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. For monthly deep dives into the matter, be sure to look for our Mortgage Monitor report on the first Monday of every month.