As forbearance levels continue to shrink, the number of borrowers in permanent loan workouts has grown. The percentage of loans in some form of completed workout – such as repayment plans, deferrals, or modifications – rose to 6.53% in January, up from 6.41% in December and 6.04% a year earlier.
Mortgage performance improved overall, with 95.35% of loans current and not in delinquency or foreclosure, up from 95.05% in December.
However, the trend varied by region. States with the highest share of current loans included Idaho, Washington, Oregon, Alaska, and Colorado. Meanwhile, Louisiana, Mississippi, Indiana, West Virginia, and Alabama had the lowest share of current loans in servicers’ portfolios.
Despite the improvements, uncertainty remains over how external economic factors, such as housing affordability and potential natural disaster recovery efforts, could impact the trajectory of forbearance and loan modifications in 2025.
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