The coronavirus pandemic has cast a shadow over the nation's eight-year housing market boom, and the predictions are eye opening. The country faces a possible foreclosure surge over the coming months that could more than double the number of households threatened with eviction
Anywhere from about 225,000 to 500,000 homeowners across the country could face possible foreclosure throughout the rest of 2021 because of delinquent loan payments.
But here's what interesting right now. Dallas real estate attorney Rachel Khirallah says she's not seeing really any foreclosures at the moment. She says that's partly because the president has put a moratorium on federal foreclosures, those are any foreclosures that were backed by Freddie Mac or Freddie Mae, also the various forms of financial assistance through unemployment has kept homeowners afloat.
But the prediction is that will dramatically change come 2021, and many of those financial benefits will end. According to an analysis by ATTOM Data Solutions, the number of cases somewhere in the foreclosure process would shoot up more than 100-percent, from the current level of about 145,000 to roughly 336,000, and that's just in the second quarter of 2021.
"For Texas for example, I wouldn't be surprised if we saw anywhere from a 100-percent increase in where the foreclosures where this year, versus where they are next year, in other words, I would not be surprised if we saw between 100 and 200,000 foreclosures in Texas within the next year,” said Khirallah. “Then across the country in states such as Florida and California where the home prices are generally higher, it's not going to be unusual to see a 300-percent increase."
For those who feel they are at risk of losing their home and already behind on their mortgage payments, Khirallah says the first piece of advice is to be proactive. Pick up the phone and call your lender, or mortgage servicer.
"For example, typically mortgage companies won't start the foreclosure process, and by foreclosure process, I mean sending out a notice of default, accelerating the loan, and then ultimately foreclosing. They won't start that until you're about 60 to 90 days past due,” said Khirallah. “If you are at that point, you should call your mortgage servicer to see where you're at. Get that information. I promise you it will make you feel better."
It's important to note, that even if the worst predictions pan out, the impact would still be milder than when 600 to 950,000 homes faced possible foreclosure from 2008 through late 2011.
For a look at the full analysis by ATTOM Data Solutions:
