Foreclosure Protection and Forbearance Will End with Little Impact on Borrowers or on Home Inventory
Fortune July 26, 2021 11:36AM “Something big is about to happen in the housing market” by Lance Lambert
Read Fortune for all detail
Summary by 2244
“The end is near for the mortgage forbearance program and the foreclosure moratorium.”
As COVID hit “government support, recession-induced low interest rates, and eager homebuyers set off a housing boom” pushing median home prices up 24%. And now “the foreclosure moratorium, which prevents foreclosures of federally-backed mortgages,” is targeted to end July 31st. Later on September 30th, “the mortgage forbearance program, which allows … 1.75 million or 3.5%... of borrowers to pause their payments will lapse” as well.
Unlike the 2008 mortgage crash, today’s post-COVID-borrowers have newfound equity and therefore are unlikely to experience foreclosure. Some may choose to sell and “it could have a big impact on the historically tight housing market.” With inventory at slightly more than 50% of a typical market the question being asked is how many homes will hit the market to add to the 1.37 million currently available? “Home.LLCs’s model forecasts an additional 11% increase to housing inventory later this year. But that may not be enough to lower prices.” Home.LLC’s CEO Nik Shah says…”we project that home prices will continue to grow rapidly even if the forbearance program ends.”
Even better news for homeowners who can resume payments “the White House” commented “For homeowners who can resume their pre-pandemic monthly mortgage payment and where agencies have the authority, agencies will continue requiring mortgage servicers to offer options that allow borrowers to move missed payments to the end of the mortgage at no additional cost to the borrower.”