We’ve been waiting for a sizable drop in the number of active forbearance plans, given the large number of plans both marked for either review (for extension/removal) or final expiration in September.
Well, this week has brought the first real signs of that. In fact, according to our McDash Flash daily forbearance tracking dataset, the population dropped by 11% since last Tuesday, marking the largest weekly decline in 12 months.
The number of active forbearance plans fell by 177,000 this week with declines seen across all investor classes, led by an 84,000 plan drop among FHA/VA loans. Plans among GSE loans and those held in bank portfolios and private label securities also fell, seeing 50,000 (-11%) and 43,000 (-8%) declines respectively.
As of October 5, 1.39 million mortgage holders remain in COVID-19 related forbearance plans, representing 2.6% of all active mortgages, including 1.4% of GSE, 4.3% of FHA/VA and 3.6% of portfolio held and privately securitized loans.
Overall, forbearances have declined by 294,000 (-17%) over the past 30 days, the fastest monthly rate of improvement since October 2020. Plan exits surged then as the first wave of forbearance entrants reached their six-month mark. The folks who’d remained are now reaching the end of their allowable terms.
There are still more than 180,000 plans with September month-end review dates. Keep in mind that this data only covers the last business day in that month and the first three in October. Additional exits are likely in coming weeks as well as servicers continue to work through the large volumes of expirations.
We will continue to monitor the very latest forbearance data from the McDash Flash dataset and report our findings each week on this blog.