This was roughly what was expected for the first week of the month, though there is still some potential for further drops given the remaining scheduled expirations.
Entering October there were some 700,000 plans set to expire at the end of this month. As of last week, 366,000 remained. Of those, 161,000 expired at the end of October, meaning some 200,000 were worked through in the last week of the month.
There were 225,000 homeowners removed from forbearance last week, the largest number since the first week of October. Still, it was less than a third of what we saw in that first week of the month, as there were far fewer plans set for expiration this month.
The decline was seen across all investor classes, with GSE forbearances falling by 57,000 (-5.2%), portfolio/PLS forbearances falling by 52,000 (-7%) and FHA/VA forbearances by 43,000 (-3.7%). GSE forbearances continue to see the strongest rate of improvement with the number of forbearance plans now down 48% from their peak in late May, followed by portfolio/PLS forbearances which are down 44% from their peak. FHA/VA loans continue to see the slowest improvement with forbearance volumes down just 27% from their peak earlier in the year.
As of November 3, there are 2.9 million active forbearance plans, representing some 5.4% of mortgage-holders, down from 5.7% last week and the lowest we’ve seen since mid-April during the onset of the pandemic. Together, they represent $584B in unpaid principal.
There were 87,000 starts over the past week, the largest volume since April, but 57% of these repeat starts on folks who had been in forbearance, left their plans, and have now returned. Regardless, these starts and restarts are worth watching, as they're trending upward. It may well be that this is still due to the drop in early October, but given the rising trend, they warrant a close eye.
With 135,000 plan extensions, extensions made up just 37% of activity this week. Some 80% of currently active forbearance plans have had their terms extended at some point since March, while 20% remain in their initial term.
Some 3.7% of all GSE-backed loans and 9.3% of all FHA/VA loans are currently in forbearance plans.
