According to the latest report from Black Knight, Inc., a well-respected data and analytics provider for mortgage companies, 6.48 million households have entered a forbearance plan as a result of the COVID-19 pandemic. Here’s where these homeowners stand right now:
- 2,543,000 (39%) are current on their payments
- 625,000 (9%) have paid off their mortgages
- 434,000 (7%) have negotiated a repayment plan
- 2,254,000 (35%) have extended their original forbearance plan
- 512,000 (8%) are still in their original forbearance plan
- 116,000 (2%) have left the program and are still behind on payments
There are still 2.77 million borrowers in a forbearance program. No one knows for sure how many of those will become foreclosures. There are, however, three major reasons why most experts believe there will not be a tsunami of foreclosures as we saw during the housing crash over a decade ago:
- Almost 30% of borrowers in forbearance are still current on their mortgage payments.
- Banks likely don’t want to repeat the mistakes of 2008-2012 when they put large numbers of foreclosures on their books. This time, many will instead negotiate a modification plan with the borrower, which will enable households to maintain ownership of the home.
- With the significant equity homeowners have today, many will be able to sell instead of going into foreclosure.
Bottom Line
There will be more foreclosures entering the market later this year, especially compared to the record-low numbers in 2020. However, there is no need for the majority of folks in forebearance to experience foreclosure!! Call me at 615-310-1909 or fill out the contact box below for a free no obligation consultation regarding your options!