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Mortgage Delinquency in the Real World

According to industry sources : “https://www.housingwire.com/articles/mortgage-delinquency-rate-reaches-prepandemic-levels/ there are “one-half million more loans in serious delinquency in October than at the start of the pandemic in March 2020.” If you think about that for a minute, you have to wonder: (1) How effective were all the forbearance measures set up in DC at the start of Covid? (2) How much longer can we expect these delinquent inventory units (i.e., YOUR HOME!) to stay off the market? (3) Inflation has already hit rental rates throughout the country, but how will adding another 500,000 family to the tenancy pool affect the cost of renting? (4) how much will the added foreclosure inventory send real estate investors into a buying frenzy or will they remain cautious and continue to wait for the anticipated price correction on the horizon?

Two trends we’ve noticed in our foreclosure defense law practice: (1) Lenders are more open than in years past to allow first or second time defaulting borrowers to enter programs to give them time to catch up. Those programs are a wonderful safety net but create problems of their own. Once borrowers are back on their feet, they still face unreliable accounting of accrued arrearages and payment adjustments. It feels like the 80’s and the days of “Negative Amortization.” (2) The forbearance period dealt a major blow to the foreclosure law firms who chauffeur delinquent properties to the auction block. Two years of mortgage moratoria have left those firms struggling to find other sources of legal revenues. Layoffs have depleted the ranks of many of the foreclosure firms. While they attempt to staff up to keep up with projected demand, there is less willingness to “think outside the box” when creative but more time consuming solutions may make for a better result for lenders and borrowers. The foreclosure firms are overwhelmed, revenue starved and very focused on “getting the foreclosure ball across the goal line” in order to get paid.

What this means for borrowers teetering on the edge of the cliff of default is that you need to get help much sooner than before the days of Covid. It is definitely better to have AN ADVOCATE helping you with modifications, short sales, forbearances, etc., BEFORE the loan is referred to the foreclosure law firms.

Give our Department of Distress Relief a call and take advantage of the free first consultation to learn more about your options and how to keep your home OFF the auction block!