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56 Temporary foreclosure prevention efforts implemented almost immediately after the COVID-19 pandemic was declared in March 2020 helped the U.S. housing market avoid an estimated 3.2 million foreclosure starts and 1.5 million completed foreclosures, according to a new Auction.com analysis. "(ese are) much better results than we ever would have guessed a priori given the magnitude of the pandemic," said Laurie Goodman, Institute Fellow at the Urban Institute and Founder of the institute's Housing Finance Policy Center, citing statistics from Black Knight showing that 5% of the 8.2 million mortgages that entered forbear- ance during the pandemic are still delinquent or in active foreclosure. "Obviously this was helped by robust home price appreciation, but the results were truly extraordinary." e Auction.com analysis used public record data from ATTOM Data Solutions and delinquency data from the Mortgage Bankers Association to determine the historical roll rate of seriously delinquent mortgages (SDQ)—those where the borrower is at least 90 days behind on mortgage payments—to foreclosure start and foreclosure completion. ROLL RATE REVERSAL ose historical roll rates, which were remark- ably stable during the eight-year housing boom leading up to the pandemic, plummeted during the pandemic, likely due in large part to massive, pan- demic-triggered foreclosure prevention programs. e foreclosure prevention programs were headlined by a nationwide foreclosure morato- rium on government-backed mortgages—in- cluding those insured by the FHA, Veterans Administration (VA), and U.S. Department of Agriculture (USDA) along with those owned by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac—and a generous forbearance program that gave borrowers an up to 18-month pause on mortgage payments. e Auction.com analysis calculated expect- ed foreclosure starts and foreclosure completions based on the average roll rates from SDQ be- tween 2012 and 2019 and actual SDQ numbers reported during the pandemic. Due to the sharp spike in SDQ rates following the pandemic dec- laration, this calculation results in an expected 3.6 million foreclosure starts and nearly 1.7 million foreclosure completions between Q2 2020 and Q3 2022. But the actual number of foreclosure starts during that period was only 405,000—nearly 3.2 million fewer than expected. e actual number of completed foreclosures during the same period was 169,000—more than 1.5 million fewer than expected based on historical roll rates. In percent- ages, actual foreclosure starts were 788% lower than expected while actual foreclosure comple- tions were 872% lower than expected. Up until the pandemic, the historical roll rates from SDQ to foreclosure start and from SDQ to foreclosure completion serve as reliable predictors that err slightly on the side of under-predicting the actual numbers. For the eight-year period ending in 2019, the roll rate calculation predicts counts that are just 3% below the actual numbers for foreclosure starts, and less than 1% below the actual numbers for foreclosure completions. LESSONS LEARNED FROM THE TRIUMPH OF PANDEMIC FORECLOSURE PREVENTION During the pandemic, an estimated 3.2 million foreclosure starts were prevented, along with the completion of approximately 1.5 million foreclosures. Feature By Daren Blomquist

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