Over the first week of the year, the number of mortgages in active forbearance plans in the U.S. fell by 92,000 (a decline of 3%), the largest weekly drop since early November. The decline was driven by the large volume of quarterly forbearance plan expirations at the end of December, many of which were reaching their nine-month point.
There was improvement across all investor classes this week, with FHA/VA forbearances falling 33,000 (-2.8%), a 32,000 (-3.3%) decline among GSE-backed loans and a 27,000 (-3.9%) reduction among loans held in private label securities or banks’ portfolios.
Despite the decline, this represents a troubling slowdown in the rate of improvement. The 3% decline in the first week of January fell starkly short of the 9% decline seen in the first week of July (which brought about the first quarterly wave of expirations) And it pales in comparison to the 18% reduction in the first week of October when plans began to reach six-month expirations.