“Both new forbearance plans and plan restarts rose this week, with new plan starts trending higher since mid-August,” Black Knight said in a statement. “The rise in new plan starts is almost solely limited to FHA/VA loans, coinciding with the deadline for entry into forbearance for such loans expiring at the end of September. That said, unemployment benefits lapsed over the Labor Day weekend, and COVID caseloads continue to rise, so it’s difficult to pinpoint the exact cause.”
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About 218,000 borrowers exited forbearance plans over the first half of September, according to the report. Meanwhile, plan extensions are at their lowest since the start of the pandemic, with only 45,000 plans extended this week.
“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. As many as 330,000 are set to reach their final plan expirations based on current allowable forbearance term lengths,” Black Knight said.