Reductions in the number of mortgage loans in forbearance picked up speed last week, typical of the first week of each month. Black Knight says the number of plans fell by 71,000, with the strongest decline in FHA and VA mortgages which were down a combined total of 36,000 or 4.8 percent. The number of GSE (Fannie Mae and Freddie Mac) loans dropped by 18,000 or 3.2 percent and portfolio and private label securitized (PLS) loans fell by 17,000 or 3.0 percent.

As of August 3, the company estimates that 1.82 million loans or 3.4 percent of all active mortgages, remain in COVID-19 related plans. This includes 551,000 GSE loans, or 2.0 percent of those portfolios, 721,000 FHA and VA loans (6.0 percent) and 551,000 portfolio/PLS loans (4.3 percent).

 

 

Even though there were few reductions in the middle of July, the number of active plans is down 131,000 from early in that month. Black Knight said this was a slightly slower rate of improvement than in recent weeks. The slowing rate is attributed to stronger than average declines early in July as the initial wave of forbearance entrants went through their 15-month review process.

Of the plans reviewed over the past week, just under 60 percent exited the program while 40 percent were extended for another three months. That's down from a 65-35 exit/extension ratio at the same time last month. Plan starts, including both new plans and restarts, pulled back this week, hitting their lowest weekly mark since early July.

More than 340,000 plans are due for a review this month. An estimated one-third will reach their final expiration based on current allowable forbearance term lengths.