Due to the Covid Lockdown, many Americans have used the 2020 Cares Act payment forbearance to stay out of foreclosure. Although many are over 90 days delinquent on their house payments, Jonathan Payne of American Financing says lenders are still trying to fend off foreclosure. "A lot of mortgage companies don't really want foreclosure so they are trying to prevent it...one reason is that it's very expensive. Most companies are doing what they can." He says foreclosure means houses will be sold at under-market value, which will hurt property prices which will lead to unwelcome economic problems in the long run.
Although many American mortgage payments are over 90 days past due, Payne says it would have been worse without the 2020 Cares Act Foreclosure Forbearance. "As of April 23, 2021, 91.6% of mortgage holders have made their mortgage payments which is up from March, 2021. So it looks like it's going in the right direction." He says most lenders don't want to go through foreclosure with any home owner, because it's expensive for them and most homeowners really don't want to lose their biggest asset. Payne says although a year after the beginning of the Covid Lockdown, mortgages in severe payment distress are ten times higher. If foreclosures do begin, Payne says we will probably see economic problems due to lower property prices.