NEW YORK–The number of mortgages in active forbearances plunged last week as the first wave of forbearance plans hit the end of their six-month term. It was the largest decline since the crisis began.
Over the past week, active forbearances dropped by 649,000, or 18%, according to Black Knight, a mortgage technology and data analytics firm. That brings the total number of plans, both government and private sector, below three-million for the first time since April. In addition, the decline was noticeably larger than the drop of 435,000 when the first wave of forbearances hit the three-month mark in early July, according to MSNBC.
As of Oct. 6, 2.97 million homeowners remain in pandemic-related forbearance plans, or 5.6% of all active mortgages, down from 6.8% the previous week. The loans represent collectively $614 billion in unpaid principal, the Black Rock data show.
"As the first wave of forbearances from April hit the end of their initial six-month terms, we've seen the strongest decline in the number of active plans since the pandemic began," Andy Walden, Black Knight economist and director of market research, told MSNBC. "Though the market continues to adjust to historic and unprecedented conditions, these are clear signs of long-term improvement."
800,000 More Over 30 Days
An additional 800,000 forbearance plans are slated to reach the end of their initial six-month term in the next 30 days, the company reported.
The improvement in mortgage bailout numbers was across all investor classes, but portfolio-held and private-labeled security loans saw the greatest reduction, with active forbearances falling 24%, or by 228,000, Black Rock said.
Forbearances on loans backed by Fannie Mae and Freddie Mac declined by 16%, or by 213,000. FHA/VA loan forbearances declined by 15% — by 208,000, the report added.