COVID restrictions are starting to ease up quickly and our outlooks on the future are beginning to blossom. The foreclosure moratorium has also been lifted around the country. There are almost 10 million borrowers enrolled in loan forbearance plans allowing them to take a break from making mortgage payments. Most of these borrowers have run out of time or will run out soon. So, will 2022 be the year of the foreclosure in Jacksonville?
When the COVID pandemic arrived early 2020, a flood of self-proclaimed experts in real estate came forward and warned about a surge of foreclosures that would hit the market in 2020. Then these same experts claimed another wave of foreclosures would hit in 2021. But it never happened.
In an effort to be proactive, our President declared a National Emergency and we saw a moratorium on foreclosures and evictions and the implementation of a broad forbearance program that was open to nearly everybody. This put delinquent loans into a time warp, but today most of them have concluded their programs.
We seek to answer whether or not 2022 will be the year of the foreclosure, as the federal moratorium has been lifted, and we need to evaluate the pipeline of delinquencies to prepare for a potential wave of distressed sellers hitting the market.
Current Status Of Pandemic Related Forbearances in the US
Almost 10 million borrowers have been in forbearance at some point since the pandemic began. Below, we’ll break this down into status categories.
- Removed/Expired – Performing: 53%
- Paid Off: 27%
- Removed/Expired – Delinquent: 9%
- Active Forbearance – Term Extended: 7%
- Active Forbearance – Original Term: 3%
- Removed/Expired – Active FC: 1%
What do all these stats mean? When the first national emergency forbearance program was launched, it caused many to worry about a resulting flood of new foreclosures. Instead, something else happened. About 90% of all borrowers already exited their forbearance plans, with more than 50% returning to regular mortgage payments and another 27% paid off their loans in full. There are currently almost 450,000 borrowers still working through options with their lenders.
Current Status Of Loans That Have Left Pandemic Forbearance Plans
Black Knight reports that nearly 1.4M borrowers ended forbearance plans since the beginning of October 2021. Less than one tenth of them have since become delinquent and entered loss mitigation efforts with their loan servicers. This group of borrowers represents the strongest potential for foreclosure listings to enter the real estate market. Even so, many will be able to avoid foreclosure by selling their homes on the open market.
What Does All This Mean for Foreclosures in Jacksonville?
Before 2022 is over, the US housing market will sell more foreclosed homes than it did in 2021. Of course, there was a foreclosure moratorium in 2021, so this isn’t a big shock to the market. But it’s important to remember that foreclosure sales occur all the time, so the fact that we’ll see them this year is not surprising.
The fact that it’s been a seller’s market for some time now will certainly help with foreclosures. For homeowners in Jacksonville who may be facing foreclosure, you have more options than ever to sell your house fast and avoid these financial woes.
You Can Avoid Foreclosure in Jacksonville and We Can Help!
Long story short, we do not believe 2022 will be the year of foreclosures because of companies like Orbit Properties. We buy houses fast in Jacksonville, helping Florida homeowners avoid foreclosure. Not sure where to start or just curious about your options? Call us today at (904) 425-2513. We’ll give you a fast and fair offer on your Jacksonville home in one day or less.