Originally posted by @Michael Dumler:
@Dan Powers I agree. I don't think will see a correction in the market for at least a year or two.
As far as inventory coming to the market, a couple things to note. One factor being the forbearnce period. I don't see any reason why this would be kicked into 2022. Question is, how behind are homeownes on payment and are lenders willing to set guidelines to help? Another piece at play is the eviction moratorium set to expire at the end of July. This gives the opportunity for landlords to finally collect rent. However, if payment is not issued, this could lead to a lot of movement in the rental category.
My prediction, home prices to peak in 2022 and then will see some leveling out.
IMO the lenders will work out some kind of payment arrangements with those borrowers who can afford to pay - a loan modification with a higher monthly payment or a loan modification that puts the arrears into a second mortgage that is payable on sale or at a refi or at payoff of the primary mortgage. I say this for two reasons: first, the lenders learned from ten or so years ago that to have too much inventory from foreclosure the property values will plummet; second, two years ago I bought a house where the owners had a second mortgage that was their arrears rolled into it (and they had to come to the settlement table with close to $60K to pay off, lucky for them they had received an inheritance that covered).
Those who can’t pay can’t be offered that kind of help, so those will proceed to foreclosure.
And if the lenders don’t do that on their own, I suspect that the lawmakers in DC will make that mandatory for the loans with federal backing, so that will cover a huge chunk of mortgages.
