Covid mortgage bailouts are expiring fast, but here’s why a foreclosure crisis is unlikely
- There are still 1.618 million borrowers in forbearance programs, or 3.1% of all outstanding mortgages
- Some 98% of those troubled borrowers have at least 10% equity in their homes, not counting their missed payments.
- Fast-rising home prices have pushed the level of home equity up from a little over $6 trillion at the start of the pandemic to just over $9 trillion.
The number of borrowers in both government and private sector Covid mortgage bailout programs is falling fast, but for those still in trouble, the future is not as bleak as originally thought.
Extraordinarily high levels of home equity, thanks to the recent runup in home prices, has struggling borrowers in a far better position now than they were at the start of the pandemic.
The number of active mortgage forbearance plans, in which borrowers were allowed to delay their monthly payments, fell by more than 5% from the previous week, according to a new report from Black Knight, a mortgage data and analytics firm.