Foreclosures Coming as Forbearance Ends?

Victoria and Dave Ranck
Victoria and Dave Ranck
Published on June 30, 2021

Will there be mass foreclosures as forbearance ends? We don’t think so and here’s why.

► Get the latest Sarasota Real Estate Market Update here:
https://ranckhomes.com/new-update

▬ Contents of this video ▬▬▬▬▬▬▬▬▬▬
0:00 Introduction
0:29 Ban on foreclosures ending
0:40 What is forbearance
1:12 CFPB Rules for Smooth Transition
2:15 New Rules Examples
2:55 Homeowner Options
3:15 Why We Won’t See a Flood of Foreclosures
4:10 How to Prevent Foreclosure
4:55 CFPB Website
5:05 Sarasota Market Update

▬ Links to more information on foreclosures ▬
► CFPB Issues Rules to Create Smooth Forbearance Transition
https://www.floridarealtors.org/news-media/news-articles/2021/06/cfpb-issues-rules-create-smooth-forbearance-transition

► ATTOM Data Solutions Webinar: Distressed Housing Market Outlook
https://www.youtube.com/watch?v=kBJc65QLDQ0

► CFPB Website
https://www.consumerfinance.gov/

#foreclosure #sarasotahomesforsale #forbearanceextension #mortgageforbearanceenddate

▬ About Victoria and Dave Ranck ▬
We are Realtors in the Sarasota, Lakewood Ranch and Venice areas of sunny Florida.
► Website: https://victoriaranck.com/
► Virtual Home Tours: https://victoriaranck.com/tours
► Email us: https://victoriaranck.com/contact

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Get the latest Sarasota Real Estate Market Update here:
https://ranckhomes.com/new-update

▬ Partial transcript ▬
The ban on mortgage foreclosures is ending. What does that mean for those who are taking advantage of forbearance options? Will we see a flood of foreclosed homes on the market?

About 7 million homeowners have taken advantage of hardship forbearance and about 2 million are still in forbearance. It is expected that around 900,000 homeowners will exit forbearance between now and the end of the year.

The Consumer Financial Protection Bureau or CFPB has finalized amendments to federal mortgage regulations that are designed to reinforce the ongoing economic recovery as the federal foreclosure ban is phased out.

These rules were created to help protect homeowners from unwelcome surprises as they exit forbearance. They create safeguards to help ensure homeowners have enough time before a foreclosure to investigate their options, such as loan modification and selling the home.

The new rules are intended to facilitate a smooth and orderly transition, They require lenders to redouble efforts to prevent avoidable foreclosures. Here are some examples:

Give Homeowners a “meaningful opportunity” to pursue their options. Lenders must meet temporary “special procedural safeguards” before they begin foreclosures on certain mortgages through the end of this year.

They allow homeowners to get help faster. Loan modifications can be streamlined as long as it doesn’t increase loan payments and there are other built-in protections as well.

Homeowners must be told their options. Lenders must increase homeowner outreach before they initiate a foreclosure and explain the available options.

What are the options that homeowners have in general?
One, they could resume normal payments with the missed payments added to the end of the loan.
Two, their monthly payment could possibly be lowered
And three, they could sell their home. Americans have record amounts of equity in their homes and this may be an option for many homeowners.

So far according to an ATTOM Data Solutions Webinar, 86% of exits from forbearance are successful and that is encouraging. In this webinar, see the link below, Rick Sharga, the Executive Vice President of RealtyTrac outlines this and other reasons that lead him to believe we won’t see a flood of foreclosures. This is very encouraging.

Foreclosure levels will rise according to Mr. Sharga, but not exponentially. He cites the following reasons:
One, Loan quality was excellent heading into the crisis
Two, Economic recovery is better than expected
Three, Government and industry intervention is providing homeowners with the time they need
Four, Record equity gives homneowners a cushion
And five, The incredible supply/demand imbalance provides alternatives for both homeowners and lenders

So what can you do to prevent foreclosure if you are in a tough situation?
First and most important is to communicate with your lender. Don’t put it off. And discuss your options with them.
If you can afford a higher payment for a time ask about a repayment plan to make up for missed payments.

Or consider deferring missed payments to the end of the loan.
If you can no longer afford your payments you may be able to have the loan modified to reduce the monthly payment
Finally if the only option you hear about is a lump sum repayment, ask about other options. Lenders cannot usually require a lump sum repayment.

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