Forbearances Dip Into February

More than 90 percent of single-family homeowners who sought financial assistance through COVID-related mortgage payment forbearance have emerged from those plans and exit volume is on a slowly decelerating track heading into February.

According to our McDash Flash daily mortgage performance dataset, the number of active forbearance plans decreased 45,000 (-5%) this week. GSE plans (down 24,000, -9%) led an across-the-board drop, along with a 12,000 (-4%) decline in plans for loans held in bank portfolios and private-label securities (PLS). FHA/VA plan volumes fell 10,000 (-3%).

In a positive sign, plan start volumes for both new starts and restarts edged lower after climbing in recent weeks.

As of February 1, 790,000 homeowners remain in COVID-19-related forbearance plans, representing 1.5% of all active mortgages. The group includes 0.9% of GSE mortgages, 2.3% of FHA/VA and 2.0% of portfolio held and privately securitized mortgages.

Plans are down by 58,000 (-7%) from the same time last month, as the overall rate of improvement continues to slow with lower expiration activity.

Potential for additional improvements over the coming week remains, with nearly 50,000 plans tagged for January review dates. Of these, we expect some 15,000 will reach the end of their allotted terms.

We will continue to monitor the very latest forbearance data from the McDash Flash dataset and report our findings each week on this blog.