The mortgage forbearance program enabled families who are financially impacted by COVID-19 pandemic to pay their mortgage at a later date. Many housing experts expressed their heightened concerns about the possible outcome after the program ends may lead to a wave of foreclosures.
Experts initially predicted that there may be up to 30% of homeowners who will choose to enter the forbearance program, but in actuality, only less than 10% did, and based on recent reports – this number is gradually but continuously decreasing.
In fact, Black Knight’s latest report showed that the active forbearance volume is down to 5.2% or about 2.77 million homeowners.
Furthemore, the latest Mortgage Bankers Association (MBA) shows that almost one quarter of those in forbearance are still current on their mortgages.
Looking at the current housing market, homeowners who are on a forbearance plan may be looking at a positive forbearance outcome on the horizon.
What sets the difference between NOW and the 2008 Great Recession?
- Strategic Defaults will be minimal
During the 2008 Great Recession, house values were less than what they owe, many chose to just walk away from their house and let it go to foreclosure (called strategic defaults) – thus a wave of foreclosures at the time. This time it is different – the record low mortgage interest rate and high housing demand increases many homeowner’s home equity thus decreasing the possibilities of strategic defaults.
- No forbearance moratorium in the 2008 Great Recession
Twelve years ago, there were no forbearance options, and most banks did not put in other programs, like modifications and short sales, until very late in the crisis.
- Substantial Equity
With high home equity comes the bank’s higher confidence. Unlike the 2008 Great Recession, banks are comfortable enough to provide options to the borrowers.
- Shortage of Homes for Sale
Currently, the real estate market has a shortage of listings for sale. In 2008, homes for sale flooded the market.
- Housing Value
Despite the pandemic, housing prices are appreciating. In 2008, prices were depreciating dramatically.
What if YOU don’t qualify for the servicer’s options?
For homeowners who can’t keep up on past payments and don’t qualify for the programs offered by their servicers, they must get in touch with Analytics Before Foreclosure to come up with actionable intelligence for their home.
Analytics Before Foreclosure can help you with the following options that will alleviate the stress you currently going through with your mortgage:
- Loan or Lender Changes
- Short Sale
- Foreclosure Prevention
If you are behind on your mortgage, NOW is the time to make a move. Being proactive is always the best option for a homeowner. A foreclosure can be avoided the majority of the time by being proactive and taking steps to work with your lenders. However, time is not your friend. The process has picked up speed so it’s urgent to take action.
If you’re behind on your payments call 866-857-5405 for a FREE discovery call.
You have nothing to lose by taking action now and maybe everything to lose if you don’t.
