Number of Loans in Forbearance Spiked Last Week

The number of active forbearance plans jumped higher this week, increasing by a net of 31,000 loans. Black Knight says that, as of July 27, there were 1.893 million homeowners in forbearance, about 3.6 percent of the nation's universe of 53 million mortgage loans. Despite last week's surge, Black Knight notes that there are still 163,000 fewer loans in the program, a 7.9 percent reduction, than at the same point last month.

Forbearance plan starts hit their highest weekly level since late March, with restart activity also remaining elevated. Roughly 2/3 of all starts over the past week were restarts. At the same time, removals were the lowest since late May.

The week's change was accounted for almost entirely by a 35,000 increase in the number of forborne loans serviced for bank portfolios and private label securities (PLS). There are now 568,000 such loans, 4.4 percent of those loans being serviced. Loans serviced for FHA and the VA also increased slightly, to 757,000, 6.3 percent of those totals, up by 1,000 loans week-over-week. Those increases were only slightly offset by a 4,000 decline in loans serviced for the GSEs Fannie Mae and Freddie Mac. There are now 569,000 of those loans in forbearance, 2.0 percent of the total.

The company said there are about 179,000 plans that are still scheduled to be reviewed for extension or removal before the end of July. This presents an opportunity to return to the previous downward trajectory in the number of plans.