AZ Forbearance Update (Video) 10/21/2020

In this 13 minute video, Lydia Wietsma and I discuss the latest news in forbearance and emerging trends and where borrowers can go for help. We have some suggestions for conversations with clients and borrowers. The bottom line is that people have options but they have to take action, watch the full video for details.

Forbearance:

  • Over 6 million households (renters and owners) were either late or missed their full or partial payment in September.
  • 8.5% or 2.82 million renters missed their payment.
  • 7.1% or 3.37 million owners missed their payment.
  • Mortgages in forbearance dropped from 6.32% to 5.92% to roughly 3 million loans, down from the previous week’s 3.2 million loans.
  • This removes another 200,000 from forbearance programs. One reason given for the 200,000 this week and last week coming off is that borrowers do not know they can stay on or further negotiate their plans. If borrowers do not make any phone calls or connect with their lenders or servicers they are automatically being removed from their forbearance plan. This is a big deal.

Mike Fratantoni, MBA’s Senior Vice President and Chief Economist said, “The share of loans in forbearance declined across all loan types, primarily because of borrower forbearance plans expiring at the six-month mark. Federally backed loans under the CARES Act are eligible to be extended for up to 12 months, but borrowers must contact their servicer for an extension. Without that contact, borrowers exit forbearance, whether they are delinquent or current on their loan. Borrowers with federally backed mortgages should contact their servicer if they still have a hardship due to the pandemic.”

Silver Lining:

According to the Mortgage Bankers Association (MBA), purchase mortgage originations for 2021 are expected to increase by 8.5% from 2020. They expect 2021 will hit an all time record of $1.54 trillion!

The added demand, to an already high demand market, will continue pushing prices up which will help struggling homeowners who need to sell. They will have a greater equity position giving them more options and having options is good.

Resources:

Published by Sarah Perkins

Sarah has been with Lawyers Title of Arizona since 2004. As an award-winning sales executive, Sarah's role is to bring transactions to Lawyers Title. To do this, she focuses on supporting her clients and helping them navigate the ever-changing real estate space through thorough research and understanding of current trends impacting today's home buyers and sellers.

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