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4 Reasons Why There is Little Risk of Foreclosures

There is an article written by Rick Sharga who has been one of the leading experts on foreclosure rates for at least 15 years. He says according to the Mortgage Bankers Association, 85% of borrowers in forbearance have exited the program successfully. WOW! Currently there are about 1.7 million borrowers still in forbearance and if 85% of them can exit successfully that means only 255k borrowers will exit forbearance needing to sell their home or risk being foreclosed on.

Next, Rick points out that the parent company he works for, ATTOM Data Solutions says more than 70% of homeowners have more than 20% equity in their homes. Whereas, during the Great Recession over 30% of homeowners had negative equity. That’s a HUGE difference which greatly reduces the risk of another foreclosure crisis.

Third, Rick says the foreclosure rate before Covid was tiny at just 0.6%, well below the normal level of 1%. I know here in CO our foreclosure rate was 0.3% for a long time before Covid.

Fourth, 30-and 60-day late payments are currently at record lows. And if a borrower is not even 30 days late they are in NO danger of foreclosure or short sale.