Sign up to save searches, bookmark properties and never miss a price drop or new listing!

My Account

Jason Taub - Realtor
Jason Taub - Realtor

Mortgage Forbearance Helped Homeowners – And the Real Estate Market

Freddie Mac: Forbearance did more than help at-risk owners. It also stopped a foreclosure surge from hurting the market and helped all homeowners retain their value.

WASHINGTON – According to Freddie Mac’s latest Insight, without forbearance, many households may have defaulted or been forced to sell their homes during the COVID-19 pandemic. These forced sales could have depressed the housing market, leading to further defaults.

Mortgage forbearance temporarily removes the obligation for borrowers to make their monthly mortgage payment. Forbearance plans are typically used by borrowers who experienced a sudden loss of employment, a reduction in income or damage from a natural disaster.

Mortgage forbearance provides liquidity to households and plays a vital role in mitigating the damage to homeowners during times of crisis, whether it be a hurricane, wildfire or health epidemic, said Sam Khater, Freddie Mac’s chief economist. Research on this topic is important because it will help us prepare for the next several months as we continue to navigate the COVID-19 pandemic and beyond.

Report Highlights

  • Forbearance rates in the COVID-19 period (March 2020 to June 2020) are similar in level to those experienced in those areas impacted by the major storms in 2017 (August 2017 to December 2017) but much higher than the baseline period (January 2019 to February 2020). The forbearance rate is 5.6% during the COVID-19 period and 5.8% during the 2017 storms period. In contrast, in the baseline period, the forbearance rate is only 0.09%, even though the baseline spans a longer time horizon.
  • While loans with high loan-to-value (LTV) ratios are more likely to be in forbearance, almost all loans in forbearance have positive equity.
  • Forbearance rates decline for borrowers with higher FICO scores.
  • In the COVID-19 period, the rate increases by a factor of about 5.6 going from loans with FICO scores in the highest category (800+) to the lowest category

Copyright © 2020 Global Data Point; provided by SyndiGate Media Inc. (Syndigate.info). All rights reserved.

About Jason Taub - Realtor

Native South Floridian. Resident of downtown Fort Lauderdale for 8 years. Served on the Board of Directors for condo association of 400+ units. Extensive knowledge of the Fort Lauderdale area and Broward County. Buy, Sell, Rent - I've got you covered.

About D'Angelo Realty Group

From the inception of the downtown Fort Lauderdale condo market, consistently year after year, D’Angelo Realty Group has been the local market leader with a proven track record and longevity of listing and selling luxury estates in the greater East Fort Lauderdale area. Closing well over 1,200 condominium transactions and over $2 billion in real estate sales, the expertise within our full scale real estate brokerage will secure the highest market value for sellers and negotiate the most equitable price attainable for our buyers.

Contact Jason today for all of your real estate needs. Available 24/7.

Compare listings

Compare