With the foreclosure moratorium lifting, how many foreclosures can we expect?
The federal moratorium on foreclosures and evictions is due to expire after July, so we will begin to see the foreclosure process begin again after that point. While it will take a while for these homes to reach the point of sale, how many can be expected to actually hit the market? This article by NAR has some interesting answers.
Forbearance
According to the information provided in the linked NAR article, roughly 2.7 million homeowners are delinquent on payments (with 1.8 million of those more than 90 days behind).
Those are huge numbers to be sure, but there is some good news. NAR reports that over three-quarters of them (77%, in fact) are already enrolled in forbearance program repayment plans. This should help to reduce the number of foreclosures and blunt the economic impact that would otherwise be felt.
Foreclosure
Despite the heavy participation in loss mitigation plans, there are still over 400,00 homes who have exited the forbearance period without a plan. Experts cited in the NAR article expect that a third or less of these homeowners will sell before foreclosure, so the inventory bump from last minute sales may not be tremendous. The remainder may either modify their loans (NAR estimates this will be helped by the incredible rise in home values over the past year) or may be foreclosed upon.
So, while it may not be the spike in foreclosures that was initially feared, there will be an increase that could be enough to help cool the sellers market in some areas. Check out the linked article for more information on what areas currently see the most foreclosure risk linked to high rates of mortgage delinquency.
