{"id":2179,"date":"2021-11-04T12:44:13","date_gmt":"2021-11-04T12:44:13","guid":{"rendered":"https:\/\/phphouses.com\/blog\/?p=2179"},"modified":"2021-11-04T12:44:13","modified_gmt":"2021-11-04T12:44:13","slug":"wave-foreclosures-not-way","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/wave-foreclosures-not-way\/","title":{"rendered":"Why a Wave of Foreclosures Is Not on the Way"},"content":{"rendered":"
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Why a Wave of Foreclosures Is Not on the Way<\/p><\/div>\n

With forbearance plans coming to an end, many are concerned the housing market will experience a wave of foreclosures similar to what happened after the housing bubble 15 years ago. Here are a few reasons why that won\u2019t happen.<\/p>\n

There are fewer homeowners in trouble this time<\/strong><\/h4>\n

After the last housing crash, about\u00a09.3 million households<\/a>\u00a0lost their homes to a foreclosure, short sale, or because they simply gave it back to the bank.<\/p>\n

As stay-at-home orders were issued early last year, the fear was the pandemic would impact the housing industry in a similar way. Many projected up to\u00a030% of all mortgage holders<\/a>\u00a0would enter the forbearance program. In reality, only 8.5% actually did, and that number is now\u00a0down to 2.2%<\/a>.<\/p>\n

As of last Friday, the total number of mortgages still in forbearance\u00a0stood at\u00a0 1,221,000<\/a>. That\u2019s far fewer than the 9.3 million households that lost their homes just over a decade ago.<\/p>\n

Most of the mortgages in forbearance have enough equity to sell their homes<\/strong><\/h4>\n

Due to rapidly rising home prices over the last two years, of the 1.22 million homeowners currently in forbearance,\u00a093% have at least 10% equity<\/a>\u00a0in their homes. This 10% equity is important because it enables homeowners to sell their homes and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create.<\/p>\n

The remaining 7% might not have the option to sell, but if the entire 7% of those 1.22 million homes went into foreclosure, that would total about 85,400 mortgages. To give that number context, here are the\u00a0annual foreclosure numbers<\/a>\u00a0for the three years leading up to the pandemic:<\/p>\n