The number of loans in forbearance dropped by 83,000 over the last week. This is on top of a 71,000 loan reduction during the first few days of August. Black Knight reminds that this type of change is typical at the beginning of each month as servicers conduct three month reviews of homeowners to determine if their forbearance plans will be extended. As of August 10, 1.74 million homeowners, 3.3 percent of those with a mortgage, remain in COVID-19 related plans, the first time the number has fallen below 1.8 million.
The numbers improved for all loan types. There was a reduction of 43,000 (-7.8 percent) in loans serviced for bank portfolios and private label securities (PLS), leaving 3.9 percent of those loans in forbearance. The number of GSE (Fannie Mae and Freddie Mac) loans fell by 15,000 and FHA and VA loans by 25,000. This leaves 1.9 percent of GSE and 5.8 percent of FHA/VA loans in forbearance.
Black Knight says the number of active plans has declined by 125,000 since the same point in July, and new plans, total starts, and restarts hit their lowest point since early last month. More than 110,000 homeowners have exited forbearance in each of the last two weeks.
Of the 185,000 plans reviewed during the week ended August 10, 62 percent exited the program. More than 250,000 plans are still scheduled for review over the remainder of the month. For about one-third of them it will be the last review prior to the plan's expiration according to current allowable forbearance terms.