Forbearance is when your mortgage servicer or lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage. The borrower will pay the payment reduction or paused payments back later.
Throughout the first week of November 2021, forbearances saw a decline of 85,000 marking the expiration of plans with terms that typically last for 18 months. For reference, the week prior saw a decline of merely 19,000 homeowners exiting forbearance.
The largest declines were seen in FHA and VA loan programs; out of the 85,000 total, 42,000 came from FHA and VA plans. In addition, Fannie Mae and Freddie Mac numbers also improved with 22,000 homeowners leaving the program during the week of November 2.
A total of 1.14 million loans remain in forbearance, making up 2.1% of all currently active mortgages. This breaks down to 424,000 VA and FHA loans. The remainder of loans remaining in the program represent $212 billion in unpaid principal.
While the greatest factor of this decline is due to loans reaching the final month of their forbearance plans, the new entrants rate has also fallen by 8%. This makes it the lowest level of restart activity since the beginning of October and hopefully alluding to more improvements to follow.
If you have any questions regarding forbearances, please feel free to call us at (760) 930-0569 and one of our loan officers will assist you.