Even though data shows inflation is cooling, a lot of people are still feeling the pinch on their wallets. And those high costs on everything from gas to groceries are fueling unnecessary concerns that more people are going to have trouble making their mortgage payments. But, does that mean there is a big wave of foreclosures coming? Here’s a look at why the data and the experts say that’s not going to happen.
There Aren’t Many Homeowners Who Are Seriously Behind on their Mortgages
One of the main reasons there were so many foreclosures during the last housing crash was lending standards made it easy for people to take out mortgages. Mortgages were given to people who were unable to pay them back. Lenders weren’t being as strict when looking at applicant credit scores, income levels, employment status, and debt-to-income ratio.
But since then, lending standards have gotten tighter. Lenders became much more diligent. That means we are seeing more qualified buyers who have less of a risk of defaulting on their loans.
Freddie Mac and Fannie Mae data shows there are fewer homeowners seriously behind on their mortgages.
Borrowers are more qualified now. They are finding ways to navigate through their challenges and exploring repayment options.
The Answer Is: There’s No Sign of a Wave Coming
The number of people who can’t make their mortgage payments would need to rise significantly and that’s not happening. Since so many buyers are making their payments today and homeowners have equity built up, a wave of foreclosures isn’t likely.
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