Buyer Question: Should I wait for the wave of foreclosures that is coming?

So one question that you might be getting occasionally from buyers is "I'm going to wait until we see a lot more foreclosures hitting the market...I know they're coming."

A couple of stats that has been recently reported in thew news is that 12% of mortgages across the country had recently been delinquent. Buyers see the headline and naturally assume we are heading back to a 2009 kind of market cycle where there's going to be a ton of foreclosures.

That's not true. Why? Because this is a completely different market environment. 

The first reason reasons we won't see a massive surge in foreclosures is because of the CARES Act, which was created in response to the COVID pandemic. The CARES Act includes a provision which forces lenders to offer forbearance to people that are in financial trouble. Forbearance allows borrowers to skips payments for a period of time or pay interest only payments. It started with a 180 days and it's now been extended for another 180 days. So a total of 360 days, almost a full year of forbearance for people that are in a situation where they can't make their payment.

The other issue is equity. The latest studies show that 59% of homeowners in the country have 30% or more equity, and 77% have 20% more equity in their home. Only 1% of the population is in an underwater position. Also in 2009, we had 11 months of supply coming into the great recession right now inventory is running at three or four months of supply.

But this doesn't mean you don't have an opportunity to help people that have entered that preforeclosure status. People that are in a preforeclosure status often have lost their jobs, or have a financial challenge in their household. We can help by providing trusted advice and marketing services so they can unlock their equity. The Path Performance Coaching program provides scripts for making contact, along with emails, and letters.