Is there a tsunami in April?

[Dan Sayre]

A source for the banking sector said that lenders have given a significant number of borrowers forbearance to get through Covid shutdowns.But forbearance is ending. 

And borrowers will need to pay all the back payments over the next 12 months. This is on top of the normal monthly debt payments. This could spell disaster for undercapitalized SFR and small MFH borrowers.

Many simply won't be able to do it, and as a result, a wave of foreclosures is on the horizon. Borrowers will sell for the price of the loan, just to get out and avoid foreclosure. If they can't, future borrowing will be more expensive and more difficult for them.

Wave breaks in April and crests in the fall.Any truth to this or...?

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[Bill B.]

There’s some truth, IF the bank wants to foreclose and own your home. Otherwise that is only 1 of 4 or more options they have. Assuming they don’t want bad press or to own a home, they’ll just take another of the options...

https://www.experian.com/blogs...

We are in a huge bull market for housing  I assume anyone who is in financial trouble will sell, put a bunch of cash in their pocket and either downsize or become a renter. Unless they leave a market completely I don’t see it affecting houses prices very much. If a renter buys their place and they move in to a rental no inventory has been created  if they sell and downsize no inventory has been created  the only inventory you’re going to make is someone moving in with family/friends (I assume the truly desperate did that 6 months ago when they couldn’t afford utilities.)