For the first time since the early days of the pandemic, the number of mortgages in active forbearance is under 900,000, following an 11% decline for the week ended Dec. 7, according to Black Knight.
This leaves 882,000 borrowers remaining in forbearance, an 112,000 decline from the prior week and a 177,000 drop compared with the previous month. The last time active forbearance plans were this low was at the end of March 2020.
Private-label securitizations and portfolio mortgages recorded the largest reduction in active plans from the previous week, with a decline of 15% and 49,000 loans exiting. The government-guaranteed mortgage programs, Federal Housing Administration and Veterans Affairs, had a 42,000 unit decrease, or 12%, while loans held by the government-sponsored enterprises only had a 7% decline, or 21,000 mortgages exiting.
"There is a modest opportunity for additional improvement in coming weeks with 33,000 loans still listed with November reviews for extension/removal (roughly half of which are expected to be reaching their final expirations)," Andy Walden, vice president of market research, wrote in a blog post.
It was during the week ended Nov. 30 that active pandemic-related forbearance plans first sunk below the 1 million level.
But not all of the forbearance news from this past week is good, Black Knight cautioned. Oer that period, there were 17,000 new plan starts — defined as borrowers who hadn't been in forbearance before that now are.
"Plan starts are up 24% over the past four weeks, driven by a more than 40% increase among FHA/VA loans (with GSEs seeing a 29% increase)," Walden said. "We have been watching this trend closely and will continue to report on it."
This week's activity follows approximately 8,000 new starts for the week ended Nov. 23. The following week's starts were at a pandemic low, but Walden attributed that to Thanksgiving weekend in a previous blog post.
