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e number of mortgages in active forbearance in the first week of
February fell below 2.7 million for the first time in 10 months, another
milestone pointing to a largely successful program that has prevented much
harm to the U.S. housing market.
Building on the success of the forbearance
program, three key disposition strategies will
help speed healing in the housing market when
the pandemic wanes and foreclosure moratoria
are eventually lifted:
» Prioritizing the foreclosure of vacant or
abandoned properties to prevent an influx
of zombie foreclosures
» Leveraging strong buyer demand to
uncover hidden equity for distressed
homeowners
» Innovating pre-foreclosure sales to make
them a viable foreclosure prevention option
for more distressed homeowners
VANQUISHING THE VACANT
Many mortgage servicers are already
adopting the first strategy: expediting the
foreclosure of vacant or abandoned properties.
Data from Auction.com shows steady increases
in completed foreclosure auctions on vacant or
abandoned property—which are exempt from
the national foreclosure moratoria on federally
backed mortgages. e increases in vacant
foreclosures correspond roughly with large
volumes of mortgages exiting forbearance.
Completed foreclosure auctions increased
to a seven-month high in October, according to
Feature By: Daren Blomquist
HOW
DISTRESSED
DISPOSITION
CAN HEAL, NOT
HARM
Here are three strategies to speed healing and help homeowners in a post-
pandemic housing market.
