Mike Fratantoni, MBA’s chief economist, said, “The significant churn in the labor market now, more than six months into the pandemic, Covid-19 is still causing financial distress for millions of homeowners.”
About 29% of total loans in forbearance are in the initial plan stage, while 70% are in a forbearance extension, MBA said. The remaining 1.4% are forbearance re-entries, the report said.
Under the CARES Act, homeowners can ask for forbearance from their mortgage servicer and suspend payments for up to 12 months. Approximately 4.3 million homeowners have requested forbearance since the program began. However, over the last several months, the number of people with mortgage loans in forbearance has continued to drop, decreasing to 3.4 million in the last week of September, according to the Mortgage Bankers Association.
Covid-19 is Still Causing Financial Distress.
Krish Swaminathan said, “Servicers are most concerned about what’s going to come down the pipe in a few months. At some point soon, we’re going to have foreclosure issues, maybe another need for forbearance – things relating to nonpayment. There’s going to come a time where homeowners are going to be under pressure, and the defaults and/or late payments are going to start, which is, in turn, going to cause foreclosures and defaults.
Servicers got through the forbearance period, and now they should begin to think about how to prepare themselves for a possible wave of defaults and the resulting actions from that.
9 Ways to Save House from Foreclosure
You Can Bring the Loan Current
Believe it or not, your lender wants to work with you to help you get back on track. Foreclosure is no picnic for either party involved. And, frankly, both you and your lender lose in the end.
Work Out a “Forbearance Plan”
– a forbearance agreement provides short-term relief for borrowers. With a forbearance agreement, the lender agrees to reduce or suspend mortgage payments for a certain period and not initiate a foreclosure during the forbearance period.
Ask for a Loan Modification
A loan modification could include a reduction of the interest rate, convert the loan from a variable interest rate to a fixed interest rate, or extend the length of the term of the loan. A loan modification agreement is a permanent solution to unaffordable monthly payments.
If there is a temporary hardship, you can request a Repayment Plan
Repayment options could include a plan to repay missed payments in addition to making monthly payments.
Sell Via a Short Sale
You may be able to sell your home with the bank’s permission before the foreclosure process begins. A pre-foreclosure sale, also known as ashort sale, allows homeowners to sell their home at current market value and use that money to satisfy their mortgage.
File for Bankruptcy
You can contact a bankruptcy attorney. You need to know your options so you can make an informed decision. Filing for bankruptcy stops a foreclosure proceeding.
You may qualify for FHA Programs for Homeowners
Home and Garden writes about thepartial claim,a loan modification offered by the U.S. Department of Housing and Urban Development (HUD) for FHA-approved loans [source: HUD]. The FHA provides an interest-free loan to pay off your missed mortgage payments, and it doesn’t need paying off until you sell your home or make your last mortgage payment [source: HUD]. There are many programs for those with floundering financials.
A Deed-in-Lieu of Foreclosure
a deed instrument in which the borrower conveys all interest in a real property to the lender to satisfy a loan in default and avoid foreclosure. At the height of the housing crisis in 2007-2008, it was called “jingle mail.” Homeowners put their house keys in an envelope, mailed them to the bank, and then drove away. A deed-in-lieu is a more formal process for jingle mail.
Sell the Home to a Cash Buyer
You can Save House from Foreclosure by calling Styl Properties, Inc. It is quick! I can sell my house in Omaha, generally in 30 days or less. That is much quicker than a traditional sale, which can take several months, and closing occurs after repairs. In most cases, when an investor and a seller can agree on a price immediately, they can close as fast as one to two weeks.
A real estate investor will buy as-is
. I don’t need to worry about some repairs that I’ll need to fix based on an appraisal? An investor will estimate the repairs needed to restore your property, arrive at an offer, and will purchase the property in whatever condition.
A real estate investor doesn’t charge you a real estate commission and may take care of any other nagging financial problems such as back taxes, code violations, or past due water and sewer bills.
As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. We offer the simple truth about your home and how we can help you sell it fast.
Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577.