Despite a devastating health crisis that has brought layoffs and furloughs to the local workforce, we don’t expect to see a rush of foreclosures like we saw in 2008. There are two reasons:
Forbearance extensions. Under the CARES Act, lenders are providing relief to homeowners who are impacted by the coronavirus, allowing them to temporarily defer or reduce mortgage payments for 180 days. Homeowners
can also apply for an extension and get an additional 180 days of forbearance, for a total of up to 360 days.
Strong homeowner equity. Compared to 2008, today’s homeowners have far greater equity in their homes. In fact, according to the Mortgage Monitor report from Black Knight, 77 percent of homeowners who are in forbearance
have at least 20 percent equity in their homes. A strong equity position opens up options that many homeowners in 2008 did not have. To read more on why this ecomonic crisis is not the same as the crash in 2008, click here.