The administration recently announced an extension of the deadline to request mortgage forbearance from June 30 to Sept. 30, 2021. Of course, depending on your loan servicer and how long you’ve been in forbearance, you may qualify for an extension to help you get back on your feet. With this said, a big question from many is whether we should expect to see a wave of foreclosures once the forbearance programs end? Let’s take a look at the current data below:
What the data shows
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 4.37%
– Month-over-month change: -7.62%
– Year-over-year change: -42.39%
Total U.S. foreclosure pre-sale inventory rate: 0.27%
– Month-over-month change: -1.73%
– Year-over-year change: -24.23%
Total U.S. foreclosure starts: 4,400
– Month-over-month change: 15.79%
– Year-over-year change: -25.42%
Top 5 states with mortgages with 90+ day delinquencies
- Mississippi: 4.89%
- Louisiana: 4.59%
- Hawaii: 4.14%
- Nevada: 4.14%
- Maryland: 4.08%
Summary
The good news is that the national mortgage delinquency rate is at the lowest level since the start of the pandemic. In fact, the current level is even below the pre-Great Recession level. While this is welcomed news, there are still 1.5 million homeowners 90 or more days past due on their mortgages but who are not in foreclosure. This figure is nearly four times the pre-pandemic levels. Should these loans enter foreclosure, we could very well see a spike in mortgage defaults in the coming year or so. It is yet to be determined how big of an impact this will have and what will happen to overall home values.
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