A Key Tool to Avoid Foreclosure
Under the CARES Act, approximately 7.2 million homeowners took advantage of forbearance plans since the start of the pandemic. Almost a year and a half later, 1.75 million homeowners remain in forbearance. As the program winds down and foreclosure moratoria expire, servicers are committed to helping homeowners navigate through the mortgage reinstatement process to successfully exit forbearance and avoid foreclosure.
Servicers have been busy shifting resources and portfolio tracking based on recent HUD and CFPB loss mitigation safeguards and foreclosure exclusions. As servicers do this, they’re also educating homeowners on their options and raising awareness on the value an equity sale can offer. If a homeowner is unable to reinstate or maintain their modified mortgage payments, this becomes a key tool to avoid foreclosure. After careful review, if reinstatement is not an option, online auctions play a critical role in loss mitigation and helping homeowners complete a graceful exit from forbearance. Here’s how it can be a win-win for both homeowners and servicers.