AZ Forbearance Update (Video) 11/25/2020

In this 11 minute video, Lydia Wietsma and I discuss the latest news in forbearance and emerging trends. The bottom line is that borrowers have options but they have to take action NOW as the COVID forbearance options are expiring in 5 weeks. Watch the full video for details.

We do these updates to help real estate professionals and consumers understand forbearance, to let struggling borrowers know they have options, and to reassure everyone that today’s market is not like the 2005 bubble/2008 crash.

Today’s Takeaways:

We are in the busiest 3rd quarter real estate has seen. The crazy low inventory has pushed house prices up around 20% this year. The news of the highly effective vaccines pushed the stock market even higher as the bull market continues.

With all of the good news, there is some less good news. Unemployment increased slightly. The number of loans in forbearance increased, very slightly last week from the previous week. It went up from 5.47% to 5.48% of loans are in forbearance, or roughly 2.7 million loans.

The increase comes from a reduced number of borrowers leaving their forbearance plans. The past few weeks we have seen a large number of forbearance plans exits. This past week saw a reduction in exists. The new entries remained about 21% of all loans in forbearance and just under 77% are in an extension plan. Re-entries remain at just under 2%.

“Incoming housing market data remain quite strong, with existing-home sales in October reaching their fastest pace since 2005, and the inventory of homes on the market hitting a record low. However, renewed weakness in the latest job market data indicates that many homeowners are continuing to experience severe hardships due to the pandemic and still need the support that forbearance provides.”

Mike Fratantoni, Chief Economist for MBA

Affordability is taking a main stage with economists and housing experts. According to the Home Opportunity Index, the Phoenix area saw a nearly 3% decrease in affordability from Q2 to Q3 while wages remained the same. The inequities in the balance is putting pressure on our market which will only increase.

Enrollment into the current COVID-19 forbearance protections created in the CARES Act are expiring on 12/31/2020. Struggling borrowers need to contact their mortgage servicer for options before the end of the year. The time is now to get started.

The servicer Lydia works with is changing their tune slightly. The questions are changing as they are asking about the state of the owner, for example, they are asking: Are the owners living in the property? Is it abandoned? Etc.

Published by Sarah Perkins

Sarah Perkins is an award winning account executive and has been in title sales since 2004. As the Director of Industry Research & Senior Account Executive, Sarah’s role is to bring real estate transactions to Navi Title. Sarah supports her clients by 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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