The number of borrowers with mortgages in forbearance plans dropped by 11% last week, making it the largest weekly decline in 12 months, according to Black Knight’s McDash Flash daily loan-level forbearance data.
“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, and now we’re seeing the first real signs of that,” said Andy Walden, Black Knight’s economist and director of market research. “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, the company said.
As of October 5, 1.39 million mortgage holders remain in COVID-19-related forbearance plans, according to Black Knight data. That’s 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, Black Knight says forbearances have declined by 294,000 (-17%) over the past 30 days, the fastest monthly rate of improvement since October 2020. But Walden pointed out that 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,” Walden said.