Some Lenders Say They’ll Resume Foreclosures in July
Bank of America says it will resume foreclosures in July, though “the amount … is way down, and most of the clients have become current,” and JP Morgan Chase says 90% of customers have left forbearance. But Wells Fargo plans to wait until 2022 to resume foreclosures.
NEW YORK – Pandemic-related moratoriums on foreclosures and evictions expire June 30, and some lenders plan to start resuming foreclosures in July. About 2.1 million homeowners are still in mortgage forbearance, which means they’re delinquent but not an immediate foreclosure possibility, according to the Mortgage Bankers Association.
As of April, however, about 1.8 million households who aren’t in forbearance were 90 days delinquent on their loan, according to Black Knight data.
Bank of America says its foreclosure suspension will end on bank-owned loans and government-backed loans when the national moratorium ends at the end of June.
“The good news is the amount of deferrals is way down, and most of the clients have become current,” Brian Moynihan, CEO of Bank of America, said at last week’s Senate hearing. “Irrespective of that deadline passing, we’ll continue to work with a few clients we have left to help them.”
JPMorgan Chase said during the hearing that about 90% of its customers have exited forbearance programs.
Forbearance and delinquency rates have gradually dropped since the nation started reopening last summer. Nearly 92% of mortgage holders were making loan payments as of April 23, the largest share for any month since the onset of the pandemic, Black Knight reports.
Some lending giants plan to delay taking any action against delinquent homeowners even after federal moratoriums expire. For example, Wells Fargo told lawmakers that it plans to extend moratoriums on foreclosures and evictions for loans that they own until the end of the year. Wells Fargo also said it supports the Consumer Financial Protection Bureau’s proposed rule that would prevent lenders from initiating foreclosure proceedings until 2022.
The housing industry anticipates more inventory in the coming months, according to National Association of Realtors® (NAR) Chief Economist Lawrence Yun.
“We’ll see more inventory come to the market later this year as further COVID-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes,” Yun said after last week’s existing-home sales report. “The falling number of homeowners in mortgage forbearance will also bring about more inventory.”
Source: “Bank of America and Chase Could Restart Mortgage Foreclosures as Early as July, But Wells Fargo Is Waiting Until 2022,” CNBC.com (May 27, 2021)