There’s no sugarcoating it. The pandemic was hard on a lot of Americans, leaving many jobless and without a choice but to put their mortgages in forbearance.
And as forbearance comes to a close, many are wondering: is a wave of foreclosures on the horizon?
The answer you can tell your clients is a sound “no.”
Here’s why according to experts:
- There are far fewer homeowners in trouble this time
- Most of the mortgages in forbearance have enough equity to sell, rather than foreclose, on their homes
- The current low inventory market can absorb listings – it needs them
Today, the probable number of foreclosures coming out of the forbearance program is nowhere near the number of foreclosures that impacted the housing crash.
To give some perspective, according to the Wall Street Journal:
“Between 2006 and 2014, about 9.3 million households went through foreclosure, gave up their home to a lender or sold in a distressed sale.” This time, we’re talking about just a few hundred thousand mortgages potentially in that situation, thanks to the forbearance plan.