The good news? Only 3.6% of all active mortgages remain in forbearance. The bad news? The mortgage foreclosure moratorium comes to an end on July 31st. The good news? The Biden Administration rode to the rescue with a new mortgage relief program. The bad news? The Biden Administration rode to the rescue with a new mortgage relief program. And today, FHFA announced an extension of the COVID-19 REO eviction moratorium through September 30, 2021.
Where do we stand in terms of the forbearance crisis? According to Black Knight As of July 13, 1.9M borrowers remain in COVID-19 forbearance plans, making up 3.6% of all active mortgages and 2.0% of GSE, 6.3% of FHA/VA and 4.4% of Portfolio/PLS loans.
Forbearances rose most significantly among loans held in bank portfolios or private label securities (+35K), with FHA/VA mortgages seeing an uptick as well (+1K) The 5K decline among GSE loans offset just a small share of the total weekly rise.
There are still some 179K plans are still scheduled to be reviewed for extension/removal in July, which provides some substantial opportunity for improvement next week.
While still low, new 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.
Removal volumes were the lowest since late May given the low volume of review activity at this time of month.
But with Covid Delta Variant and the Biden Administration saying that they are considering the return of the economy-destroying lockdown that will result in MORE deficit spending, MORE Covid relief programs, all of which will require MORE Federal Reserve spiking of the monetary punch bowl.
This is the never-ending mortgage crisis that started in late 2007 (partly due to the Federal government pushing affordable housing and homeownership so hard the it broke). Then it was the foreclosure crisis, this is a Covid-related government-shutdown crisis.
Government housing policies (push for homeownership and the Covid economic shutdowns) require The Federal Reserve to spike the punch bowl perpetually.
The Federal Reserve is the punch bowl king.