Will Forebearance Lead to Foreclosures?
Forebearance is a government program allowing you to stay in your house without making monthly mortgage payments. You and your mortgage company agree to temporarily suspend or reduce your monthly mortgage payments for a specific period of time. After the forbearance has ended, you will need to repay the amount that was reduced or suspended. But you are not required to repay the missed amount all at once, though you have that option. You can make an additional payment each month, move the missed amount to the end of your loan term or set up a loan modification, if you are eligible.
Almost three million homes are in a plan. Almost 30% are current on their payments, but many aren't. There's speculation that a forthcoming wave of foreclosures could be the result, and home values could crash.
However, many homeowners have tremendous amounts of equity in their homes. Many homeowners will be able to use a loan modification or refinance to stay in their homes. If not, some will go to foreclosure, but most will be able to sell and walk away with their equity. If homeowners sell instead of going into foreclosure, the impact on the housing market will be much less severe because there is a lack of inventory on the market. The market should be able to absorb half a million homes with out a crash in the housing market.
If you need to sell your home to avoid foreclosure, give Veta a call.
Veta the Realtor