She said there was an additional reason not directly related to the mortgage industry that could also delay foreclosure proceedings. “Courts are being incredibly backed up because of the pandemic,” she said.
“Come August 01 you’re not going to see this huge deluge. Every state has its own process for foreclosures, which makes things pretty complicated – in some states it could take longer than three years to foreclose on the house.”
Describing MBA’s latest forbearance survey findings as “encouraging”, she said: “We’ve seen a decline for 23 weeks in the forbearance rate and, quite frankly, back in March and April we thought that the rate could go as high as 20% or 30%.
“This is uncharted territory right now, but it’s certainly encouraging to see these forbearance numbers continue to drop. Borrowers are either exiting and putting in a loan deferral plan – a little less than a third are going into a loan deferral plan – or they’re simply entering a modification programme.”