The overall mortgage forbearance rate dropped to 3% from 3.1% in the past week as the number for payment suspensions fell below 1.6 million for the first time since the early days of the pandemic, Black Knight reported Friday.
At more than 1.59 million, the number of temporary payment suspensions has moved into a range similar to that seen between March 31, 2020 (803,300) and April 7 of last year (2.13 million). At current levels, outstanding forbearance could fall to one-fourth of its high (4.76 million) by next month.
“With more than 462,000 plans scheduled for review for extension/removal in September, exit volumes could be poised to rise sharply at the start of October,” Black Knight said in a blog post on Friday. “As many as 330,000 are set to reach their financial plan expirations based on current allowable forbearance term lengths.”
Although expiration is imminent for many and forbearance is down on a net basis, the filing of new plans has been increasing since mid-August, Black Knight noted. A
The looming date also meant mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs continued to have a relatively high forbearance rate in the latest week. However, it reflected a decline from the rate in
The breakdown for forbearance rates by category in the latest report was as follows: FHA/VA loans, 5.2%; private mortgages held in portfolio or
FHA/VA loans accounted for 40% of all forbearances in the most recent week, followed by private mortgages (31%), and GSE products (29%).
The latest week’s statistics from Black Knight’s McDash Flash data reflected activity as of Sept. 14.
