In our last post, we mentioned that last week’s minor reduction in forbearance plans had “set us up nicely for what could be a larger improvement next week as some 218,000 plans were still scheduled for review by Wednesday, June 30.”
Well, that larger improvement arrived this week.
Since last Tuesday, the overall number of active plans has dropped by 189,000, pushing the population of homeowners in forbearance down below 2 million for the first time early in April of last year.
The decline, as mentioned above, was driven by the large volume of early entrants reaching their 15-month quarterly review, and significant declines were seen across all investor classes.
Loans held in bank portfolios and private label securities led the way with a 78,000 reduction in plans, while FHA/VA and GSE forbearance volumes dropped by 67,000 and 44,000 respectively.
All in all, that puts us down 254,000 (-12%) from the same time last month.
Nearly two thirds of the more than 325,000 plans reviewed for extension or removal over the prior week resulted in exits. That’s the highest weekly exit rate in more than six months and the highest weekly removal volume since the first wave of plans went through their 12-month reviews a few months ago.
Forbearance plan starts also continue to fall, with both new and repeat starts down this week for a total of fewer than 26,000, a new pandemic-era low.
As of July 6, 1.86 million (3.5% of) homeowners remain in COVID-19 related forbearance plans including 2.2% of GSE, 6.8% of FHA/VA and 4.6% of Portfolio/PLS loans. Another 400,000 plans are scheduled to be reviewed for extension/removal over the next 30 days.
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.