David Deem 714-997-3486 Dave@DeemTeam.com With forbearance plans coming to an end, many are concerned the housing market will experience a wave of foreclosures similar to what happened after the housing bubble 15 years ago. Here are a few reasons why that won’t happen. There are fewer homeowners in trouble this time After the last housing crash, about 9.3 million households lost their homes to a foreclosure, short sale, or because they simply gave it back to the bank. As stay-at-home orders were issued early last year, the fear was the pandemic would impact the housing industry in a similar way. Many projected up to 30% of all mortgage holders would enter the forbearance program. In reality, only 8.5% actually did, and that number is now down to 2.2%. As of last Friday, the total number of mortgages still in forbearance stood at  1,221,000. That’s far fewer than the 9.3 million households that lost their homes just over a decade ago. Most of the...

  David Deem 714-997-3486 Dave@DeemTeam.com Even though experts agree  there’s no chance  of a large-scale foreclosure crisis, there are a number of homeowners who may be coming face-to-face with foreclosure as a possibility. And while the overall percentage of homeowners at risk is decreasing with time ( see graph below ), that’s little comfort to those individuals who are facing challenges today. If you haven’t taken advantage of the  forbearance period , it may be time to research and understand your  options . It starts with knowing what foreclosure is.  Investopedia  defines it like this: “ Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property . Typically, default is triggered when a borrower misses a specific number of monthly payments . . .”  The good news is, there are  alternatives available  to help you avoid havi...

David Deem 714-997-3486 Dave@DeemTeam.com With forbearance plans about to come to an end, many are concerned the housing market will experience a wave of foreclosures like what happened after the housing bubble 15 years ago. Here are four reasons why that won’t happen. 1. There are fewer homeowners in trouble this time After the last housing crash, about  9.3 million  households lost their home to a foreclosure, short sale, or because they simply gave it back to the bank. As stay-at-home orders were issued early last year, the overwhelming fear was the pandemic would decimate the housing industry in a similar way. Many experts projected  30% of all mortgage holders  would enter the forbearance program. Only 8.5% actually did, and that number is now  down to 3.5% . As of last Friday, the total number of mortgages still in forbearance stood at   1,863,000 . That’s definitely a large number, but nowhere near 9.3 million. 2. Most of the 1.86M in forbearance hav...

  David Deem 714-997-3486 Dave@DeemTeam.com There has been a lot of discussion as to what will happen once the 2.3 million households currently in forbearance no longer have the protection of the program. Some assume there could potentially be millions of foreclosures ready to hit the market. However, there are four reasons that won’t happen. 1. Almost 50% Leave Forbearance Already Caught Up on Payments According to the  Mortgage Bankers Association  (MBA), data through March 28 show that 48.9% of homeowners who have already left the program were current on their mortgage payments when they exited. 6% made their monthly payments during their forbearance period 7% brought past due payments current 6% paid off their loan in full This doesn’t mean that the over two million still in the plan will exit exactly the same way. It does, however, give us some insight into the possibilities. 2. The Banks Don’t Want the Houses Back Banks have learned lessons from the crash ...

David Deem 714-997-3486 Dave@DeemTeam.com By Jordan Grice Foreclosure filings rose in February, breaking from a trend of month-over-month declines brought on by the ongoing moratorium.    According to a new report from  ATTOM Data Solutions , foreclosure filings were up 16% month-over-month in February. There was a total of 11,281 U.S. properties with foreclosure filings last month. Despite the monthly uptick, the number is down 77% from a year prior.   "Extensions to the Federal Government's foreclosure moratorium and CARES Act mortgage forbearance program continue to keep foreclosure activity historically low," said Rick Sharga, executive vice president of RealtyTrac, an ATTOM Data Solutions company. "These government actions, and the efforts of lenders and mortgage servicing companies, have helped millions of homeowners avoid foreclosure during a year-long global pandemic and a recession that resulted in 22 million lost jobs."   One in every 12,182 housing un...

  David Deem 714-997-3486 Dave@DeemTeam.com At the onset of the economic disruptions caused by the COVID pandemic, the government quickly put into place forbearance plans to allow homeowners to remain in their homes without making their monthly mortgage payments. Today, almost three million households are actively in a forbearance plan. Though  29.4%  of those in forbearance have continued to stay current on their payments, many have not. Yanling Mayer,  Principal Economist  at  CoreLogic , recently  revealed : “A distributional analysis of forborne loans’ payment status reveals that more than one third (39.1%) of all forborne loans are now 150+ days behind payment, while as many as 1-in-4 (25.5%) are 180+ days past due.” These homeowners have been given permission to not make their payments, but the question now is:  how many of them will be able to catch up after their forbearance program ends?  There’s speculation that a forthcoming wave o...

  David Deem 714-997-3486 Dave@DeemTeam.com There seems to be some concern that the 2020 economic downturn will lead to another foreclosure crisis like the one we experienced after the housing crash a little over a decade ago. However, there’s one major difference this time:  a robust forbearance program . During the housing crash of 2006-2008, many felt homeowners should be forced to pay their mortgages despite the economic hardships they were experiencing. There was no empathy for the challenges those households were facing. In a 2009  Wall Street Journal  article titled  Is Walking Away From Your Mortgage Immoral? , John Courson,  Chief Executive  of the  Mortgage Bankers Association , was asked to comment on those not paying their mortgage. He famously said: “What about the message they will send to their family and their kids?” Courson suggested that people unable to pay their mortgage were bad parents. What resulted from that lack of em...

David Deem 714-997-3486 Dave@DeemTeam.com As the current forbearance  mortgage relief options  come to an end, many are wondering if we’ll face a foreclosure crisis next year. This is understandable, especially for those who remember the housing crisis that began in 2008. The reality is, plans have been put in place through forbearance to ensure history doesn’t repeat itself. This year, homeowners are able to request 180 days of mortgage relief through forbearance. Upon expiration of that timeframe, they’re also entitled to request 180 additional days, bringing the total to 360 days of deferred payment eligibility. As forbearance expires, homeowners should stay in touch with their lender, because creating a plan for the deferred payments is a critical next step to avoiding foreclosure. There are  multiple options  for homeowners to pursue at this point, and with the right planning and communication with the lender, foreclosure doesn’t have to be one of them. Many hom...