Home Foreclosure 18 months of coronavirus brings varied lockdown risk in US

18 months of coronavirus brings varied lockdown risk in US

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The coronavirus era has brought drastic change to the housing market, pushing interest rates to all-time lows, appreciation in home values ​​to an rhythm never seen since the 1970s and the over-indebtedness of millions of borrowers.

The overall health of mortgages has improved with the economic recovery, but nearly 2 million abstention plans to stay. In 2020, most agents had a high percentage of forbearers who used it as an insurance policy while staying up to date on their loans. Borrowers still under plans have a higher risk of going into foreclosure.

“You’re going to see a lot of scrambling where people find out they have very large expenses,” said Thomas Showalter, Founder and CEO of Candor Technology. “It’s going to be a little chaotic and I seriously doubt the average delinquent borrower is prepared because I think most of them thought the past due interest payments had been canceled rather than waived.”

Opinions differ as to whether a foreclosure tsunami is on the horizon or if maintenance personnel will encounter only one moderate rise. It’s a fluid situation, likely to evolve as the pandemic progresses, given the emergence of the delta variant and other factors such as how the states distribute aid to owners.

To measure the effects of COVID-19, the Census Bureau created the Household Pulse Survey. The latest survey with data up to July 5 showed that 36% of households are not up to date on their rent or mortgage payments. According to Sara Rutledge, founder and senior economist of SRR Consulting, this action will likely be subject to eviction or foreclosure over the next two months.

Equity levels at the highest level of the decade should help keep many borrowers safe from the loss of their homes, given that mortgage underwriting standards are as pristine as they have ever been, according to RealtyTrac executive vice president Rick Sharga . But not all cities has experienced exponential growth in prices or are they all supposed to be booming cities next year. Borrowers with lower financial stakes in their properties and higher debt-to-income ratios – like those with FHA loans – will find themselves in turmoil.

“The areas where employment has been most disrupted by the pandemic are the areas most vulnerable to mortgage distress,” Sharga said. “The answer is jobs, jobs, jobs.”

Across the country, Attom Data Solutions analyzed coronavirus issues risk of foreclosure in the second quarter of 2021 by looking at a combination of factors including the number of homes underwater, foreclosure reports, and affordability in each area. The analysis included 564 counties with populations of 100,000 or more and 50 single-family homes and condominiums sold during the quarter.

Among the 250 most vulnerable counties, Florida led the country with 31, followed by 26 in California, 19 in Illinois and Ohio and 17 in New Jersey.

Outside of Philadelphia, Delaware County, Pennsylvania has ranked as the most vulnerable market in the country. It had a 36.4% share of underwater homes at the end of the first quarter, about 0.05% of mortgaged properties were foreclosed in the second quarter, and it takes 51.7% of average income to buy a home there. at the median price.

Kendall and McHenry counties, adjacent to Chicago, were next with 15.2%, 0.07% and 39.3%, and 19.3%, 0.06% and 34.1%, respectively. Passaic County, NJ, and Butte County, Calif., Rounded out the top five while the rest of the top 25 had six counties in New Jersey, five in Illinois, two in Florida and Louisiana, and one each in Arizona, Connecticut, Delaware, New York and South Carolina.

“We have about 5,000 loans in active forbearance in Florida, 2,500 in New Jersey, 650 in Chicago and about 300 in Philadelphia. I think our loan portfolio reflects the industry, ”said Bob Hora, senior vice president of default operations at Cenlar. “These vulnerable areas are definitely a problem and I expect to see a lot of foreclosure activity in these places.”

The Consumer Financial Protection Bureau added new foreclosure rules and several caveats to help borrowers in difficulty keep their property. Of course, foreclosure is a last resort in the mortgage community. Repairers and subcontractors are increasing their workforce in order to better deal with increased loss mitigation plans and avoid repossession as government programs expire.

“When the moratorium ends, duty officers may still have to walk a fine line and go easy on lockdown activities to ensure they don’t run into CFPB. or Federal Housing Finance AgencySaid Joe Panebianco, CEO of AnnieMac Home Mortgage. “One possible scenario is that we may see more deed activity instead of total foreclosures. It’s a faster, cleaner process for borrowers who are willing to vacate their homes and there is less political and regulatory risk surrounding this path. “


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