Mortgage foreclosures rise as moratorium ends: options for homeowners who may be at risk

With the end of the moratoriums on foreclosures, foreclosures are on the rise, a trend that is expected to continue over the next few years. (iStock)

Foreclosure activity is expected to remain slightly elevated over the next three months after rising in August, according to a new report from ATTOM, a mortgage data company and parent company of the RealtyTrac foreclosure market.

Foreclosure deposits – including notices of default, scheduled auctions and bank foreclosures – rose 27% from July to 15,838 deposits in August, according to the August 2021 U.S. Lockdown Market Report. This is 60% more than last year.

“As expected, foreclosure activity has increased as the government’s foreclosure moratorium has expired, but that doesn’t mean we should expect to see a flood of troubled properties hit the market,” said the Executive Vice President of RealtyTrac, Rick Sharga. “We will continue to see foreclosure activity increase over the next three months as loans past due before the moratorium re-enter the foreclosure pipeline, and states begin to make up for months of foreclosure requests that simply don’t. not been processed. during the pandemic. “

If you’re at risk of finding yourself in foreclosure or struggling to make your mortgage payments, consider taking out mortgage refinancing to help lower your monthly payments while interest rates remain at record highs. Visit Credible to see your personalized rate and compare how much you could save.


CFPB rule still suspends seizures

Despite the slight increase at the end of the moratoriums on foreclosures and evictions, residential foreclosures remain suppressed for the rest of the year, Sharga said.

“It is likely that foreclosures will stay below normal levels at least until the end of the year,” he said.

Indeed, the Biden administration implemented a new service rule through the Consumer Financial Protection Bureau (CFPB) that would delay most foreclosures until 2022. The rule, which came into effect at the end of August, prevented mortgage agents to offer a loan. modification plan to increase the monthly payment of a homeowner exiting their forbearance program. It also prevents them from extending the loan term beyond 480 months and allows them to add missed payments to prevent homeowners from falling into delinquency.

The CFPB will continue to add additional restrictions on foreclosures until the end of 2022 to protect homeowners. If you are interested in mortgage refinancing, visit Credible to compare several mortgage lenders and choose the best rate for you.


Options for homeowners to avoid foreclosure

Currently, the new CFPB service rule creates more options for homeowners to avoid foreclosure. If you’re looking for ways to avoid foreclosure and are also catching up on your monthly mortgage payments, here are a few places to start:

Loan modification

Under the new service rule, mortgage agents must work with homeowners to get them back on track with their monthly payments. With a loan modification, borrowers can reduce their costs by reducing their interest rates or changing loan terms. Homeowners can contact their loan officer to discuss their options.

Mortgage refinancing

Refinancing options could also help lower monthly payments with current interest rates below 3%. There are even new options made available by the Federal Housing Finance Agency (FHFA) through Fannie Mae and Freddie Mac for low-income borrowers or homeowners who have missed their payments due to a COVID-related difficulty. -19. Visit Credible to be prequalified in minutes without affecting your credit score.


Sell ​​your house

While this isn’t an ideal option, homeowners who can’t use other methods to start paying their mortgage payments may want to consider selling their home rather than foreclosure. Home prices are rising at an all time high and could leave homeowners with multiple levels of profit if they choose to sell their home.

If you would like to explore your mortgage refinancing options, contact Credible to speak to a mortgage expert and get all of your questions answered.

Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.

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