Hundreds of thousands of homeowners could soon lose or sell their homes if Covid-related mortgage relief programs expire.

The federal government, major banks, and mortgage workers launched emergency programs when the pandemic broke out early last year and wiped out the big swallows of the economy. The aid has allowed millions of homeowners to miss payments, some for up to 18 months.

The programs have been very successful.

More than half of the 7.7 million borrowers who flocked to existing mortgage relief programs are paying off their mortgages and making payments again, according to weekly data and analytics from Black Knight, a mortgage software company. Around 23% of borrowers have sold their homes or refinanced their mortgages to make them more affordable. About 7% or a little over half a million try to mitigate losses with their lenders while trying to create a loan modification plan.

However, hundreds of thousands of homeowners remain in trouble. Three percent of borrowers, or roughly 264,000 homeowners, are now mortgage criminalized after their programs expire, with 38,000 active deals.

“What I see now are nervous people. Many withdraw from perception, some are not yet working and do not know what to do. I try to guide them so that they first contact the servant or lender and see what their options are, ”said Margherita Diaz, a certified advisor with the Department of Housing and Urban Development of Putnam County’s Housing Association.

There are few options for borrowers who have lost too much income or lost their assets during the pandemic. Managers offer loan modifications and lower interest rates, but some borrowers cannot pay. Domestic workers loan borrowers the money for taxes and insurance during their tenure, and while this can be spread over a year of payments, some borrowers cannot afford the increase.

“There are services ready to help,” said Diaz. “But again, you know, it’s not your fault that Covid happened, so rely more on the borrower to pay himself.”

Possible exit

There is another option: sell. Thanks to a massive housing rush during the pandemic, house prices have increased by almost 20% compared to the previous year after various measures.

As a result, about 87% of homeowners currently closing have positive net worth, according to an analysis by RealtyTrac, a foreclosure website based on data from ATTOM, its parent company. These borrowers owe less on their mortgages than they owe their homes. For the 264,000 now solemn but not yet closed, they are likely to have sizable assets too.

“This is in stark contrast to how the market did during the recent housing booms and recessions when about a third of homeowners were flooded with credit,” said Rick Sharga, director of RealtyTrac.

This could help in a very tight housing market that has had low inventory for over a year. Manufacturers were unable to significantly increase production due to labor and supply chain issues. It is estimated that the market will need around one million additional homes to meet demand. These houses don’t fill up completely, but they do.

About 73% of borrowers have more than 20% equity at closing and about 28% have more than 50% equity.

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