Is U.S Expecting Foreclosure Crisis?

Even though the number of borrowers in COVID mortgage bailout programs are falling, those still in trouble, are not underwater as thought.

Thanks to the soaring home prices, leading to high levels of home equity, has struggling borrowers are in a far better position.

According to a new report from Black Knight, a mortgage data and analytics firm, the number of active mortgage forbearance plans fell by more than 5% compared to last week.

Up to 18 months of forbearance from entry into the programs was allowed for borrowers, so September is expected to see expirations of 400,000 as maximum borrowers enrolled in March and April 2020.

There still are around 1.618 million borrowers in forbearance programs, with an unpaid balance of $313 billion. Close to 98% of those borrowers now have a minimum of 10% equity in their homes.

With the current housing market status, the majority could easily sell pay off their loan, and pocket some profit.

In the second quarter of 2021, the tappable equity rose by $1 trillion. The growing home prices have pushed the home equity up from a little over $6 trillion to over $9 trillion.

CoreLogic report in July showed across the country home prices were up 18% from July 2020. Some states saw bigger gains at 33%.

According to Attom, a foreclosure and data company even when the prices and equity are both high, foreclosure starts rose 27% in August, compared to July and up 60% from August last year.

Even before the pandemic in August 2019 the foreclosure starts were more than three times higher.

Rick Sharga, executive vice president at RealtyTrac, said that the foreclosure activity increased when the government’s foreclosure moratorium expired, but it will not lead to a flood of distressed properties in the market said Attom company that lists foreclosed properties for sale.

Over the next quarter, he expects the foreclosure activities to increase because the loans that were in default even before the pandemic will reenter the foreclosure pipeline. He believes that foreclosures will remain below normal levels.

Reference Source: CNBC

https://www.compareclosing.com/mortgagenews/is-u-s-expecting-foreclosure-crisis/

Comments

Public Feedback Requested By CFPB

The Home Mortgage Disclosure Act underwent certain changes and to evaluate whether it is meeting the stated goals of detecting discrimination in mortgage lending the Consumer Financial Protection Bureau is seeking comments. The CFPB requests for assessment of the mortgage disclosure law and checks if it meets the objectives of the Dodd-Frank Act . To abolish discrimination in mortgage lending in 1975 the Congress enacted . The bureau said the request comes after an August report found that mortgage lenders as compared to white applicants were charging higher interest rates and denying credit to Black and Hispanic applicants. The bureau said that with this evaluation the CFPB will be able to maintain a fair, competitive, and non-discriminatory mortgage market. They added that the assessment is an opportunity for the Bureau to get an idea if the earlier HMDA rulemakings have improved upon the data collected, thereby reducing loans on financial institutions, and streamlining and mo

What is an Appraisal Contingency? — Best Guide for Homebuyers

About Appraisal Contingency If a home is appraised for less than the purchase price included in the contract then there is a provision that is included in the purchase contract allowing homebuyers to back out of their contract this is termed as an appraisal contingency clause. Buyers who use financing to buy a house or are buying homes in areas where prices are volatile commonly use Appraisal contingencies. How do Appraisal Contingencies work? Purchase offers have appraisal contingencies inserted into them to notify the seller that the buyer intends to have the property appraised as part of their purchase for the financing process. If th e property doesn’t appraise for the amount the buyer offered to pay then this contingency allows them the option of backing out of the contract without losing their earnest money deposit or facing other penalties. During an appraisal, a licensed professional is hired by the homebuyer to examine the property and evaluate it against the recent sal

What is Fannie Mae and Freddie Mac?

Understanding Fannie Mae And Freddie Mac What is Fannie Mae and Freddie Mac? Fannie Mae or FNMA is a nickname for Federal National Mortgage Association. It was established in 1938. It is a Government-sponsored Enterprise (GSE). In 1968, Fannie Mae ceased to exist as a government entity and became quasi-governmental, federally charted corporation to buy mortgages other than those insured by the Federal Housing Administration, otherwise known as FHA. Freddie Mac or FHLMC is a nickname for Federal Home Loan Mortgage Corporation. Freddie Mac is also a government-sponsored enterprise (GSE) which was brought into existence in the year 1970 by the Congress. It provides competition to Fannie Mae and provides funds availability in the secondary mortgage market. What is Fannie Mae's and Freddie Mac's Role? Fannie Mae’s purpose is to create a secondary market for the purchase and sale of mortgages. The secondary mortgage market is where home loans and s

How to Use Home Equity for Remodeling Projects

Important Guide How to Use Home Equity Everyone has to live somewhere and, everyone has to invest their money in someplace. So what happens when where you live, meets up with where your money is invested? Today we are going to discuss on how to use home equity for remodeling projects and things to know before using it for remodeling. For most homeowners, it is a choice between paying cash or borrowing against the equity that they have build up in their home. HELOC Or HEL? Interest rates are still significantly low, and we are not sure how long they are going to stay that way. And home values are still rising at least on average. So taking out a home equity line of credit (HELOC) or a Home equity loan (HEL) may seem like a sensible financial move. Not always the case We have explained the difference between the HELOC and HEL in our blog post “ About Home Equity Loan / Home Equity Line Of Credit .” It depends on the individual’s needs to choose between t

COMPARE CLOSING LLC

Search This Blog