Forbearances creating foreclosures with fairness


Stop Foreclosure

The untold story of 2022 is the large number of forbearing homeowners at risk of foreclosure. It is an impossible situation. Equity without liquidity.

The confusing forbearance offers and misinformation released in early 2020 created a foreclosure crisis for owners with unassisted equity.

Many news sources and industry leaders continue to advertise “it’s not 2008” as a reason not to worry about foreclosures. The ugly truth and untold story of 2022 is that a large number of homeowners forbearance due to COVID hardship are at risk of foreclosure. It is an impossible situation. Equity without liquidity.

Forbearances must be paid in full and the loan reinstated before the homeowner can refinance to pay off the default.

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State-of-the-art artificial intelligence enables news sources and industry leaders to access information about the equity of homes slated for foreclosure auctions. This is the basis of reports that there is no risk of lockdown in 2022.

The untold story is that homeowners cannot access their equity to pay off the forbearance balance. Add to that higher interest rates and a sharp decline in alternative lending sources such as hard money loans, removing options for access to capital.

Many forbearances have been converted to a deferral where missed payments are added to the loan balance. However, this new higher loan balance means an increase in monthly payments. Sometimes it’s the tipping point that pushes the default property. Higher payments that are unaffordable.

During the mortgage crisis, short sales were traded in an environment where foreclosures were a negative asset on lienholders’ balance sheets that needed to be resolved. In 2022, lien holders approach foreclosures as corporate investors leveraging assets for profit.

The pipeline of seizures in 2022 has a different cause than 2008, different systems and artificial intelligence involved, and a different sales strategy. Banks are selling REOs or, as they prefer, “owned” homes, at or above market value.

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SUSANNA KUNKEL, REAL ESTATE AGENT at EXP REALTY is a Certified Distressed Real Estate Expert. She has been helping homeowners stop foreclosure, find solutions and save their credit since 2007, when she faced her own impossible situation at the start of the mortgage crisis. Her new townhouse with a $100,000 equity could not be refinanced when her ARM adjusted because the developer walked away without completing the project. Her passion for helping homeowners at risk of foreclosure has continued ever since, having literally been in their shoes.

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