Forbearances Fall By More Than 3 Percent

Forbearance volumes retreated by 71,000 plans or 3.2% week-over-week, according to a report from Black Knight, Inc. The company added that the latest decline is continuing the trend of early-in-the-month declines. Last week marked the 12th consecutive week of declines.

Decreases were seen across all investor classes, with GSE forbearances falling by 26K (-3.8%), FHA/VA forbearances falling by 28K (-3.2%) and portfolio/PLS plans declining by 17K (-2.7%) over the past seven days.

“With 65,000 plans still listed with May 2020 expirations, opportunity for an additional modest decline remains for next week as well,” according to Black Knight's Andy Walden. “Some 700,000 plans are listed with June expirations, marking the final quarterly review for early forbearance entrants before they reach their 18-month expirations later this year.”

Additionally, plan starts saw their lowest weekly total since the beginning of the pandemic. New forbearance starts and restarts both saw noticeable declines this week. Meanwhile, plan exits hit their highest level in four weeks, driven by plan expirations/reviews taking place at the end of May.

“Given the large review volumes on the horizon, it will be worth keeping a close eye on exit activity in coming weeks – most acutely in the first week of July,” added Walden. “As of June 1, 2.12 million (4.0% of) homeowners remain in pandemic-related forbearance plans, including 2.4% of GSE, 7.1% of FHA/VA and 4.7% of portfolio/PLS loans.”