Will coronavirus-induced foreclosures hit Great Recession levels?
It was a mere 12 years ago that the freefall of the housing market nearly took down the entire U.S. economy.
The housing market crash of 2008 still strongly resonates in the nightmares of those who follow the economy –– even more so for the homeowners of the estimated 10 million homes that foreclosed between 2006 and 2016.
Today, a healthcare crisis is the storm of economic destruction rampaging through America. It is not surprising that the effect of COVID-19 and its aftermath on the U.S. housing market is closely watched. As bad as things are, it can certainly get worse if the U.S. housing market becomes one of the fatalities of COVID-19 due to mass foreclosures.
Thus, we attempt to balance a very tricky equation. On the one side, we have the sad circumstances that are driving American homes into distress and possible foreclosure, and on the other hand, efforts to mitigate this potential disaster.
If we examine the elements of this equation, we see on the negative side:
Over 22 million jobless claims filed with an additional fifteen million jobs losses expected to be documented in the next reportNearly 3 million mortgages already in forbearancePurchase application data showing more abundant year-over-year deficits each weekLenders tightening credit, restricting the types of loans offered, and some lenders going out of business
On the positive side of the equation, we have the following counter-measures:
Over $8.3 trillion of disaster relief and monetary assistance being distributed from the government for unemployment claims and business loans to help stabilize the economy until the lockdown protocols are removed.Forbearance programs that give distressed homeowners three to twelve months of a delayed mortgage payment to avoid foreclosure.
Eight existing advantages
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