Foreclosures

One official at the bureau said this fall could be an “unusual point in history” for the mortgage market as delinquent borrowers exit forbearance plans. The agency proposed new steps for servicers to help consumers stay in their homes.

Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said Thursday.

As an improving job market aided financial stability for borrowers, 2020 ended with drops in delinquent home loans, a CoreLogic report found.

While foreclosure moratoria keep the overall numbers down, zombie foreclosure rates jumped in the majority of states, according to Attom Data Solutions.

Servicers could be dealing with approximately 1.8 million distressed properties when the latest forbearance extension ends in June, Black Knight said.

The decision provides more clarity to noteholders in the state about when the six-year statute of limitations to bring a foreclosure action begins.

But distress could be compounded in a limited number of state and local areas that have been left out of the broader boom in the market, an Urban Institute report found.

While the Mortgage Bankers Association hailed the move, some experts say it could negatively impact housing inventory.

With President Biden extending the moratorium, foreclosures hit an all-time low at the start of 2021 as millions of delinquent borrowers avoided entering the process, according to Attom Data Solutions.

Gains in consumer financial stability helped to decrease the rates of distressed home loans, but job creation is needed to make recovery sustainable, a CoreLogic report found.