Homeowners in forbearance don’t have to make payments until at least March 2021. After that, a foreclosure may take years to finalize and owners might return to work.
According to a report from Black Knight based on previous natural disaster recovery patterns, mortgage delinquencies aren’t expected to return to pre-pandemic levels until at least March 2022.
Black Knight estimates that once the first wave of forbearances hit their 12-month expiration in March 2021, there may be more than 1 million excess delinquencies once forbearance ends. Looking upon that as if it’s a natural disaster, according to the report, 90-day delinquencies typically peak around three to four months later. In addition, a final foreclosure in Florida can take years since it must go through the court system.
COVID-19 has put upward pressure on serious delinquencies for five months now. In that time, a chasm widened between early stage delinquencies, which dropped 9% in August, and serious delinquencies, which saw a 5% gain in the same month.
Nevertheless, August’s gain marked the mildest increase in five months, suggesting that 90-day mortgage delinquencies could be nearing their peak.
In September’s projected numbers, 88.9% of first-lien mortgage holders made their monthly payment, compared to 88.6% in August and 87.5% in June. Black Knight estimates that the overall national delinquency rate may fall in September if increased payment activity persists during the last week of the month.
News Source: Florida Realtors
