🏡 Will there be a lot of foreclosures once the 2.3 million households currently in forbearance no longer have the protection of the program?
Some assume there could potentially be millions of foreclosures ready to hit the market.
However, there are four reasons that is unlikely ⬇️
🏠 1) Almost 50% Leave Forbearance Already Caught Up on Payments
According to the Mortgage Bankers Association (MBA), data shows that 48.9% of homeowners who have already left the program were current on their mortgage payments when they exited.
🏠 2) The Banks Don’t Want the Houses Back
Banks have learned lessons from the crash of 2008. Lenders don’t want the headaches of managing foreclosed properties. This time, they are working with homeowners to help them stay in their homes.
🏠 3) There Is No Political Will to Foreclose on These Households
Among other protections, the CFPB (Consumer Financial Protection Bureau) is proposing a new set of guidelines to ensure people will be able to retain their homes.
🏠 4) If All Else Fails, Homeowners Will Sell Their Homes Before a Foreclosure
Homeowners have record levels of equity today. In addition, 20.1% of all California homes do not have a mortgage, so the level of equity available to today’s homeowners is significant.
Good news 📰 all around 😃