Coronavirus, COVID-19, Foreclosure Defense, Foreclosures

Covid-19 Mortgage Bailouts Decline, New Foreclosure Crisis Looming

Homeowners are struggling to keep up with their mortgage payments as the coronavirus (COVID-19) crisis continues. The mortgage bailouts offered by the federal government and private sector during the crisis have helped temporarily, but as the number of bailouts begin to decline, many homeowners are finding themselves facing the possibility of impending foreclosure.

According to figures from Black Knight, a mortgage technology and data firm, approximately 3.7 million borrowers are still receiving assistance through federal government and private sector mortgage forbearance programs.  This figure represents nearly seven percent of all active mortgages. Forbearance plans allow borrowers to temporarily delay monthly payments for anywhere between three months to a year.

These plans were intended to be a temporary fix to help homeowners during a difficult, unprecedented time. Over 2 million of these forbearance plans are set to expire this month. However, only 350,000 borrowers have begun to make monthly payments again. The remaining homeowners are still struggling to come up with the funds to restart their payments. Most of these homeowners are still unemployed or are living on a reduced income due to the COVID-19 crisis.

Around three-fourths of those are still in bailout plans and are renewing their forbearance plans by another three months. CoreLogic estimates that 48,000 borrowers started their first forbearance periods this month. This figure is the lowest seen in recent months, but this does not necessarily signal a good trend for mortgage foreclosures.

CoreLogic reports that the number of mortgages that are classified as seriously delinquent, meaning they are at least 90 days past due, have more than doubled from May to June, hitting the highest figures seen in five years. The serious delinquency rate reported in June was triple what was reported in March at the start of the pandemic. Unless something major is offered through the federal government in terms of additional support, it is anticipated that the number of serious delinquencies will double by early 2022.

Fears have been expressed that this could lead to a housing crisis not seen since the last recession in 2008. During that crisis, nearly 10 million Americans lost their homes through foreclosure or short sale. The chance of this is unlikely since borrowers have more equity in their homes currently than a decade ago, which could help offset this crisis from occurring.

Florida’s most recent executive order signed by the governor has somewhat loosened the restrictions that were holding filings back. While the moratorium has been continued, the wording of this executive order has allowed for many evictions to continue, which is why the number of filings has jumped 11 percent from July to August, according to Attom Data Solutions. These figures are expected to increase throughout the remainder of 2020.

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Choosing the right attorney can make the difference between keeping your home or losing it in foreclosure. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure, please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com

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