AZ Forbearance Update 8/25/2021

In this 13 minute video, Lydia Wietsma and I discuss the latest in forbearance, delinquencies, jobs, BPOs, and inspections. We have had a lot of positive news lately which helps both homeowners and buyers.

Employment:

In Greater Phoenix, through July, has recovered 99% of jobs lost due to the pandemic and only needs 2,500 more jobs to match February 2020’s employment rate. Arizona has recovered 93.7% of the jobs lost.

Housing:

Housing inventory is slowly increasing, giving more options to our exhausted buyers. With the inventory gains, appreciation has started to slow which is also good for the overall health of the market.

Delinquencies:

Delinquency rates continue to decline as more and more renters and borrowers are getting caught back up on their payments. The 30-day delinquency rate and 60-day delinquency rates are at the lowest levels in the history of the Mortgage Bankers Survey. The 90+ day delinquency rate remains elevated above pre-pandemic levels.

Deadlines:

Forbearance: If your loan is backed by HUD/FHA, USDA, or VA, the deadline for requesting an initial forbearance is September 30th, 2021.

If your loan is backed by Fannie Mae or Freddie Mac, there is not currently a deadline for requesting an initial forbearance.

Click here to find your servicer or to see who backs your loan.

Foreclosures: The foreclosure ban has been lifted. The CFPB has specific criteria that a lender or servicer must abide by when going through the foreclosure process. This will delay many, but not all foreclosure proceedings until the end of the year. For more information click here.

Evictions: The CDC extended the eviction ban which covers about 90% of renters through October 3. This is hotly debated with strong opinions on both sides. Despite calls that the ban is unconstitutional experts recommend against moving forward with any evictions until the ban is lifted. The FHFA has banned evictions on all of its foreclosed properties with renters living in them.

Click here and here for renter advocacy information.

Forbearance Numbers:

Since our last video, the number of borrowers in forbearance declined by 100,000. We are now down to 3.26% of borrowers or 1.6 million borrowers are in a forbearance plan. Despite the low number in a plan, this was the slowest decline in over a year.

Forbearance by Stage:

  • 10% of total loans in forbearance are in the initial stage.
  • 82.3% are on extension.
  • 7.7% are re-entries.

Forbearance Exits from June 1, 2020 through August 15, 2021:

42.7% of borrowers continued making their payments (22.6%), got caught up upon exiting (13.1%), or paid off the loan with a refinance or sale (7.4%).

The percentage of exits for the group to be most concerned about, borrowers who exited their forbearance plan still behind and without a loss mitigation plan in place increased to 16.1% from 15.7% two weeks ago.

Inspections & BPOs:

Requests have slowed down and scaled back to normal levels. The tax lien notices have declined significantly.

Most of her BPOs lately have been for fourplexes. They seem to all be investors who are needing to sell. We are seeing elevated investor transactions both for corporate buy and hold or iBuyers.

Copyright 2021 Sarah Perkins

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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