FHA/VA Loans in Forbearance Struggle to Recover Compared to Other Loan Classes
Data on number of loans in forbearance from Black Knight McDash Flash daily forbearance tracker as reported on Nov 13, 2020 and May 22, 2020.
The CARES Act made forbearance available to more people as a result of COVID-19 related hardships. Nationwide, the number of loans in active forbearance peaked in May 2020, and has declined steadily since then. Now 6 months after the peak, it's clear that not all loan types are exiting forbearance at the same rate. Here is what we are seeing, according to data from Black Knight and their McDash Flash daily forbearance tracker:
Loans in forbearance that are backed by Fannie Mae/Freddie Mac have dropped by half since the peak in May.
The number of loans held in portfolio or private labeled securities ("Other") has reduced by 48% since the peak in May.
However, Federal Housing Administration (FHA) and Veterans Administration (VA) loans have lagged behind, with only a 28% reduction since the peak in May 2020.
What does this mean?
Borrowers with FHA or VA loans have faced more persistent challenges due to COVID-19 and have struggled to exit forbearance plans and return to making full payments.
This is concerning because these borrows are more likely to have less equity in their homes, and less equity means there are fewer options to avoid foreclosure if they cannot exit forbearance and return to making regular payments.
It is important to mention that fewer options in these difficult situations doesn't often mean no options. If you or someone you know may be facing foreclosure once the moratorium is lifted and forbearance expires, please contact me. I can point you to legal resources and housing counselors that can help at often little or no cost. Please contact me if you have any questions at 513-830-8227 or email@example.com. I would be happy to discuss further.
This beautiful mid-century ranch has three bedrooms, 2 baths, and nearly 2500 sf of space. The picturesque, wooded lot is nearly a half acre. Striking beams in the great room ceiling extend out to the eaves of the roof.
Ferrari's Little Italy Bakery and Restaurant is located in Madeira. It is the quintessential Italian family restaurant. But don't underestimate the bakery! Daily baked focaccia, sour dough, donuts, pastries, and much more are available. Everything I've tried so far are fantastic. The focaccia alone is enough make this a regular stop for me.