Foreclosures Will Not Become a Home Buyer’s Window of Opportunity
At the peak, more than 9 million American homeowners paused paying their monthly mortgage payments during the most difficult months of the pandemic. They did not go into foreclosure but instead entered “forbearance.” This allows homeowners with a mortgage to pause or reduce their payments for a limited time. At some point, they must resume making payments and make up the missed payments. The government says that as of July 23, 2021, there were still 1.75 million Americans in forbearance.
Forbearance Programs are Mostly Ending
What’s happening now is that these forbearance periods are beginning to end. But there is not one single “stop date” for all the forbearance programs. Instead, the end of individual forbearance plans is based on when the homeowner requested them. The government plans were originally for six months and then allowed another six-month extension that came to a total of a year. For instance, people who were initially granted a forbearance on September 1, 2020, and took a six-month extension would see their program end on September 1, 2021. However, the White House has announced a way that delinquent mortgage payers can resume making partial payments (75%) to further avoid foreclosure.
Biden Administration Announces Additional Actions to Prevent Foreclosures:
“The new steps the Department of Housing and Urban Development (HUD), Department of Agriculture (USDA), and Department of Veterans Affairs (VA) are announcing will aim to provide homeowners with a roughly 25% reduction in borrowers’ monthly principal and interest (P&I) payments to ensure they can afford to remain in their homes and build equity long-term. This brings options for homeowners with mortgages backed by HUD, USDA, and VA closer in alignment with options for homeowners with mortgages backed by Fannie Mae and Freddie Mac.”
~The White House