What Happens After forbearance

What happens to homes that are in forbearance when that program ends?  Most experts are very concerned.  Foreclosure and people walking away from homes was a big issue in 2008. 

This is not 2008 according to most experts you have choices that are not as financially credit destructive.  Although having your home in Forbearance will not help you if you are trying to purchase a home.  But, if you do decide to purchase a home, then you can potentially sell your home, or just pay back the forbearance, wait a few months and some lenders have discussed giving mortgages to people as soon as 3 months after the forbearance is paid off. 

Also looking at the homeowners that strategically made a financial move to go into forbearance, experts like Bloomberg are saying that almost 1/4 of them are actually making timely payments. So those are going to be non issues.

With 2 million families in forbearance, experts are concerned this may lead to another foreclosure disaster.  But this time is very different.

Many home owners have equity in there homes, even with forbearance, why would they just walk a way and give the bank the equity? This is one huge difference than last time.

Another big difference is lending has been considerably different, no liars loans, no signature loans, and most people that have purchased a home must have put at least 3.5% down payment.  So they have some skin in the game. 

2008 was also a time when homes for sale flooded the market, driving prices down. Now we are opposite with no home inventory to purchase.

This time around people have equity and also, can potentially refinance, or sell and use the equity and low rates for a home purchase. They will save money, or we have seen buyers with higher rates buy a bigger home, roll the equity into the bigger home and wind up with a similar or lower payment and a better rate.

Some homeowners are selling, keeping most of the equity to improve the cash flow by paying down other debts, and buying for 3.5% down.

Right now, even with record amounts of homes in delinquency home owners have much better less financially destructive options.  Please talk to a financial expert,  your CPA, Financial Advisor, or a Lender before making any financial decisions!  This can help you down the road!