Economists warn we could be in for an avalanche of foreclosures as measures designed to prop up the economy slowly run out. We've already seen extra unemployment payments stopped.
Now, some worry banks that have been working with customers to delay payments may soon take a harsh new tone.
Rachel Khirallah, a North Texas real estate attorney, says to expect as many as 200,000 foreclosures in Texas alone this year. Across the country, more than 6 million households failed to make their rent or mortgage payments in September, according to the Mortgage Bankers Association's Research Institute for Housing America.
It's a sign that the economic fallout from the pandemic is weighing on jobless Americans and as Congress stalls on relief measures. People are now at the point where they're missing more of their mortgage payments and forbearance programs are starting to expire.
Khirallah says if you've missed a forbearance payment, and you're no longer eligible for a forbearance program, you should still call your lender, and see if there is any other loan modifications or mitigation assistance that your lender can provide.
"If your loan is backed by one of the government agencies, which 85% of them are, you're actually entitled to two 180 day extensions, forbearances, on your monthly mortgage payments, and so, remember that's two 180 day forbearance programs that you are entitled to. But, you have to request them, it's not automatic. You have to call your lender, and I would put that in writing," said Khirallah.
If you have any equity in your home, Khirallah says consider selling because that's how you'll recognize that equity. She says if you let the bank foreclose on your home the likelihood of getting any equity back is unlikely.
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Khirallah says you're not going to be thrown out of your home the next day, even if the bank has sent you a notice of foreclosure sale, and even if the bank foreclosures on your home - the bank still has to go through proper legal channels to remove you from your home.
For resources on how to avoid foreclosure: https://www.hud.gov/topics/avoiding_foreclosure
