Black Knight says the number of loans in forbearance saw a significant decline over the past week, driven, as the company had said to expect, by plans expiring at the end of January. There was a net decrease of 45,000 active plans (-1.6 percent), the first improvement in three weeks. There are still 47,000 plans which were scheduled to expire on January 31 which are currently being reviewed by servicers for an extension or removal. This may mean additional modest declines over the next few days.

The greatest improvement was to the FHA and VA loan numbers. Those combined portfolios shrunk by 2 percent or 23,000 loans. Twelve thousand loans in the  Fannie Mae and Freddie Mac (GSE) portfolios left forbearance, a -1.3 percent change. The total forbearances serviced for bank portfolios and private label securities (PLS) dropped by 10,000 or 1.4 percent.

Black Knight said that, despite the strong weekly numbers, overall improvement continues to be limited. The total number of loans in active forbearance is down just 42,000 or 1.5 percent from last month.  As of February 2, 2.72 million homeowners or 5.1 percent of the nation's 53 million mortgages remain in active COVID-19 related forbearance plans. This breaks down to 913,000 GSE loans (3.3 percent of those portfolios), 1.126 million FHA/VA loans (9.3 percent) and 680,000 portfolio/PLS loans (5.2 percent). These loans have an aggregate principal balance of $541 billion.

 

 

While this is the smallest number of forbearances since late April, the company points out that volumes have been essentially stuck in the 2.72  to 2.81 million range since early November. "As we move toward the middle of February, keep in mind the trend of mid-and late month increases in active forbearance plans," Black Knight says. "Looking ahead, some 390K plans are set to expire at the end of this month. This represents perhaps the last opportunity for moderate improvement in forbearance volumes before the first wave of plans reach their currently scheduled 12-month expirations at the end of March."