Black Knight delivers update on forbearances

Final forbearance expirations expected to increase significantly in the next two months

Black Knight delivers update on forbearances

After two consecutive weeks of declines, active forbearance plans inched up by 11,000 in what has become a well-established mid-month trend.

According to data from Black Knight’s latest report, the 11,000 overall increase was driven by a 12,000 rise in plans among portfolio/PLS loans and slightly offset by a 1,000 drop in GSE forbearance. FHA/VA forbearance plan volumes held steady from the previous week.

Black Knight’s McDash Flash forbearance tracker also showed that 1.75 million (3.3% of) borrowers were still in pandemic-related forbearance as of August 17. That included 1.9% of GSE mortgages, 5.8% of FHA/VA loans, and 4% of portfolio-held and privately securitized mortgages.

“Plan volumes are now down 110,000 (-5.9%) from the same time last month, with the rate of improvement slowing slightly in recent weeks,” said Andy Walden, economist and director of market research at Black Knight. “Total plan starts were higher this week, primarily from a rise in re-start activity. New plan starts, though up slightly from last week, remain below the five-week moving average.”

Meanwhile, plan exits reached their lowest week-over-week total since late May. Of the plans reviewed since last Tuesday, 41% resulted in plan exits, up from 36% at the same time in July.

Walden expects activity to pick up in the coming weeks as forbearances near expiration.

Read more: NerdWallet shares housing market predictions for second half of 2021

“Some 200,000 plans are currently slated for review through the final two weeks of August, with approximately one-third of those reaching their final expiration based on current allowable forbearance term lengths,” Walden wrote in a blog post. “Volumes of final expirations will increase significantly in September and October.”

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