Matching 15,000 declines in plans among both GSE and FHA/VA loans were partially offset by an 8,000 rise in PLS/portfolio plans. Overall, forbearances are now down 156,000 (-8.9%) from the same time last month.
As of September 14, nearly 1.6M mortgage holders remain in COVID-19 related forbearance plans, representing 3% of all active mortgages, including 1.7% of GSE, 5.2% of FHA/VA and 3.8% of portfolio held and privately securitized loans.
Both new forbearance plans and plan restarts rose in the week, with new plan starts trending higher since mid-August. The rise in new plan starts is almost solely limited to FHA/VA loans, coinciding with the deadline for entry into forbearance for such loans expiring at the end of September. That said, unemployment benefits lapsed over the Labor Day weekend and COVID caseloads continue to rise, so it’s difficult to pinpoint the exact cause, according to Black Knight.
With two weeks left in the month, there have already been 218,000 plan exits over just the first half of September. Meanwhile, plan extensions are at their lowest since the onset of the pandemic, with only 45,000 plans extended this week.
With more than 462,000 plans scheduled for review for extension/removal in September, exit volumes could be poised to rise sharply at the start of October, according to Black Knight. As many as 330,000 are set to reach their final plan expirations based on current allowable forbearance term lengths.