BREVARD REAL ESTATE REPORT: Two Reasons We Won’t See a Rush of Foreclosures This Fall
By Bobby Freeman – Realtor // July 28, 2020
Many think we may see a rush of foreclosures this fall, facts just don't add up in this case
BREVARD COUNTY, FLORIDA – The health crisis we face as a country has led businesses all over the nation to reduce or discontinue their services altogether. This pause in the economy has greatly impacted the workforce and as a result, many people have been laid off or furloughed.
“It’s easy to believe that we could experience a rush of new foreclosure listings similar to the market in 2008,” said Jennifer McCoy, Broker/Owner for McCoy Freeman Real Estate serving all of Florida’s Space Coast.
“I have customers ask me when will the COVID foreclosures hit the market. The truth is the real estate market today is much different from 2008,” says McCoy.
The concern of more foreclosures based on those that are out of work is one that we need to understand fully.
There are two reasons we won’t see a rush of foreclosures this fall: forbearance extension options and strong homeowner equity.
1. Forbearance Extension
Forbearance, according to the Consumer Financial Protection Bureau (CFPB), is when your mortgage servicer or lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage. This is an option for those who need immediate relief. In today’s economy, the CFPB has given homeowners a way to extend their forbearance, which will greatly assist those families who need it at this critical time.
Under the CARES Act, the CFPB notes:
If you experience financial hardship due to the coronavirus pandemic, you have a right to request and obtain a forbearance for up to 180 days.
You also have the right to request and obtain an extension for up to another 180 days (for a total of up to 360 days).
2. Strong Homeowner Equity
Equity is also working in favor of today’s homeowners. This savings is another reason why we won’t see substantial foreclosures in the near future. Today’s homeowners who are in forbearance actually have more equity in their homes than what the market experienced in 2008.
The Mortgage Monitor report from Black Knight indicates that of all active forbearances which are past due on their mortgage payment, 77% have at least 20% equity in their homes, please see the graph below.
Black Knight notes:
The high level of equity provides options for homeowners, policymakers, mortgage investors, and servicers in helping to avoid downstream foreclosure activity and default-related losses.
Bottom Line
Many think we may see a rush of foreclosures this fall, but the facts just don’t add up in this case. Today’s real estate market is very different from 2008 when we saw many homeowners walk away when they owed more than their homes were worth.
This time, equity is stronger and plans are in place to help those affected weather the storm.
ABOUT THE AUTHOR
Bobby Freeman, a lifetime resident of Brevard County, has been a top Realtor in the area for over two decades. In his first year as an agent, Freeman received a Rising Star award from his Brokers. Since then he has achieved numerous sales awards from some of the largest real estate firms in the world.
Freeman, Jennifer McCoy and Nikki McCoy-Freeman are family owners of the McCoy-Freeman Real Estate Group on Florida’s Space Coast. Together they have more than 40 years of extensive experience in all aspects of the real estate industry, have sold over $420 million and are ranked in the top 1% of all Florida Realtors.
Among McCoy-Freeman Group’s achievements are Certified Luxury Home Marketing Specialist (CLHMS), Certified Distressed Property Experts (CDPE), Accredited Buyer’s Representative (ABR) and voted Best Realtor in Brevard County. The group has been featured in many news publications including CNN Money Magazine, CNNMoney.com, WFTV 9 News, News 13, WKMG News 6, Coastal Condo Living Magazine, Hot Retirement Towns Magazine and SpaceCoastDaily.com.
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