After a slight decline last week (-12,000) forbearances have increased once again, but there is some good news in terms of plan starts. Our weekly snapshot of McDash Flash daily tracking data showed the number of mortgages in active forbearance saw a 37,000 increase from last Tuesday, mirroring what’s become a common trend of mid-month upticks that we’ve observed so far in 2020.
As a reminder, since the recovery started, we’ve regularly seen the strongest declines early in the month, as expiring forbearance plans are removed.
The primary driver behind this week’s rise – as is the case with the aforementioned trend of mid-month upticks in general – came from a pullback in such plan exits, which were down considerably – but expectedly – week over week.
With more than 550,000 plans still set to expire at the end of December, we could see more positive news in terms of plan removals in the first week of January. Overall, the number of active forbearance plans is now up 31,000 from the same time last month, and – as of December 15 – 5.3% of all mortgages (2.79 million) are in forbearance.
Together, they represent $563 billion in unpaid principal. The week saw an increase of 18,000 FHA/VA forbearance plans, 14,000 among PLS/portfolio loans and a modest 5,000 rise in GSE plans.
Overall forbearance plan starts, along with both new plans and re-starts, fell this week, which can be seen as good news given last week’s increases among all three of those categories.
Some 3.5% of all GSE-backed loans and 9.4% of all FHA/VA loans are currently in forbearance plans. Another 5.2% of loans in private label securities or banks’ portfolios are also in forbearance. It bears repeating that 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.