The number of mortgages in active forbearance plans plummeted by 435,000 last week – the largest decline yet. Last week’s drop brings the total number of active forbearances to its lowest point since April 28, according to Black Knight.
As of July 7, 4.14 million homeowners were in active forbearance, representing 7.8% of all active mortgages. That’s down from 8.6% the prior week. All told, the number of mortgages in active forbearance represent just under $900 billion in unpaid principal, Black Knight reported.
Six percent of all GSE-backed loans and 11.6% of all FHA/VA loans were in forbearance plans as of last week. Another 8.2% of loans in private-label securities or bank portfolios were also in forbearance.
The largest declines in forbearance were among GSE loans, which dove by 200,000 – an 11% reduction over a single week. Portfolio and PLS loans in forbearance also fell by 11%. FHA/VA loans posted the smallest improvement, with loans in forbearance falling by 6%.
“This latest decline in the number of homeowners in active forbearance is an encouraging sign of continued improvement,” said Andy Walden, economist and director of market research at Black Knight. “The reduction of roughly 435,000 – the largest single-week drop yet – was driven at least in part by the fact that more than half of all active forbearance plans entering the month were set to expire at the end of June. While the majority of those have been extended, this week’s data suggests a significant share were not.”