If you own your home and have been struggling to make payments as a result of the coronavirus pandemic, you might have received some relief through the CARES Act or through other forbearance options for mortgages held by private lenders. Yet forbearance options are running out for many homeowners, and many more remain without work and the ability to make mortgage payments. As such, many homeowners could be at risk of foreclosure.
Based on the high rate of unemployment as a result of coronavirus shutdowns and the inability for many of those out-of-work homeowners to find meaningful employment, economic experts have predicted that we are likely to see a rise in foreclosure rates akin to that during the housing crisis and real estate burst that began in late 2007 and went into full force by 2008. By 2010, the foreclosure crisis largely had reached its peak—should we expect something similar a decade later?
Housing Analysts Say We Should Not Expect a Repeat of the Foreclosure Crisis
According to a recent article in DSNews.com, “industry professionals predict conditions won’t be nearly as bad as they were in 2008-2010” for a handful of specific reasons. We want to discuss some of those reasons with you. At the same time, we want to emphasize that foreclosure risks are real, and to underscore that you may have options to avoid foreclosure.
From loan modifications to Chapter 13 bankruptcy, an experienced foreclosure defense attorney in Oak Park can discuss the ways in which you may be able to prevent a foreclosure. However, it is important to seek help on the sooner side. If you wait too long, it may be more difficult or even impossible for you to keep your home.
Expectations for Forecloses and Losses Look “Mild” Compared to 2008-2010
Believe it or not, housing analysts say that the losses the federal government is expecting as a result of the coronavirus pandemic appear “mild compared to those in the Great Recession.” Specifically, the federal government is anticipating that Fannie Mae and Freddie Mac will experience “several billion dollars in loan losses.” Yet to put those numbers in perspective, those numbers are not “anywhere near the catastrophe” that occurred during the Great Recession.
One of the major reasons is that, prior to the coronavirus pandemic, there was not the same “frenzy of foolish lending, reckless borrowing, and rampant speculation [that] set the housing market up for a wrenching crash” more than a decade ago. Indeed, just before the pandemic led to the economic downturn, “credit standards remained tight, and the housing market was healthy.”
In addition, homeowners now have larger reserves of home equity, and the government “reacted relatively quickly and aggressively to the COVID recession,” according to the article.
Seek Advice From an Oak Park Foreclosure Defense Attorney
Are you struggling to make mortgage payments? Are you out of work as a result of the coronavirus pandemic? Do you have concerns about foreclosure and losing your home? You may have options to avoid foreclosure by discussing your options with one of the dedicated Oak Park foreclosure defense attorneys at our firm. Contact the Emerson Law Firm to learn more about how we can help you to keep your home when foreclosure is looming.
See Related Blog Posts:
Foreclosure Surge: Question is Not When, But How Much?
Long-Term Effects of Foreclosure