Black Knight: 2.8 M In Forbearance Heading Into Last Week Of 2020

Black Knight’s weekly snapshot of daily forbearance tracking data showed another slight uptick in active forbearance plans through Monday, December 21.  It’s worth noting that this week’s data represents a slightly truncated view – normally, Black Knight report forbearance numbers through the Tuesday of any given week.

The number of mortgages in active forbearance saw another slight increase this week, increasing by 20,000 from last Tuesday. Again, it’s always worth noting that mild increases like this have been common in the middle of the month. Since the recovery started, the strongest declines have typically been seen early in the month, as expiring forbearance plans are removed.

This week’s increase was primarily due to a limited amount of such removal activity, as forbearance plan extensions outpaced removals by more than 5-to-1 for the second consecutive week. With 367,000 forbearance plans still set to expire in December as we enter the final week of the month, we may be poised to see a meaningful increase in removals over the first two weeks of January

This week saw a plans among loans in private label securities or banks’ portfolios increasing by 17,000  along with a 10,000 rise in FHA/VA forbearances, while GSE forbearances fell by 7,000 week-over-week.

The number of active forbearances is now up 23,000 from the same time last month, an improvement from last week when plans were up 31,000 month-over-month).

As of December 21, there are just over 2. 8 million homeowners in active forbearance plans, representing approximately 5.3% of all active mortgages, unchanged from last week. Together, they represent $565 billion in unpaid principal.

Some 3.5% of all GSE-backed loans and 9.5% of all FHA/VA loans are currently in forbearance plans. Another 5.3% of loans in private label securities or banks’ portfolios are also in forbearance.

On a bright note, after seeing both new plan starts as well as re-start activity rise in early December, forbearance starts across the board have declined in each of the past two weeks. This improving trend can undoubtedly be seen as a positive development, as rising starts alongside unfavorable employment numbers early in the month have been threatening the broader trend of improvement of recent months.

Still, with COVID-19 cases spiking across the country, there remains a degree of uncertainty as to what the coming weeks shall look like on any number of fronts. Black Knight will continue to monitor the situation.