Chances of Another Foreclosure Crisis? “About Zero Percent.”

  There seems to be some concern that the 2020 economic downturn will lead to another foreclosure crisis like the one we experienced after the housing crash a little over a decade ago. However, there’s one major difference this time: a robust forbearance program. During the housing crash of 2006-2008, many felt homeowners should be forced to pay their mortgages despite the economic hardships they were experiencing. There was no empathy for the challenges those households were facing. In a 2009 Wall Street Journal article titled Is Walking Away From Your Mortgage Immoral?, John Courson, Chief Executive of the Mortgage Bankers Association, was asked to comment on those not paying their mortgage. He famously said:
“What about the message they will send to their family and their kids?”
Courson suggested that people unable to pay their mortgage were bad parents. What resulted from that lack of empathy? Foreclosures mounted. This time is different. There was an immediate understanding that homeowners were faced with a challenge not of their own making. The government quickly jumped in with a mortgage forbearance program that relieved the financial burden placed on many households. The program allowed many borrowers to suspend their monthly mortgage payments until their economic condition improved. It was the right thing to do.

What happens when forbearance programs expire?

Some analysts are concerned many homeowners will not be able to make up the back payments once their forbearance plans expire. They’re concerned the situation will lead to an onslaught of foreclosures. The banks and the government learned from the challenges the country experienced during the housing crash. They don’t want a surge of foreclosures again. For that reason, they’ve put in place alternative ways homeowners can pay back the money owed over an extended period of time. Another major difference is that, unlike 2006-2008, today’s homeowners are sitting on a record amount of equity. That equity will enable them to sell their houses and walk away with cash instead of going through foreclosure.

Bottom Line

The differences mentioned above will be the reason we’ll avert a surge of foreclosures. As Ivy Zelman, a highly respected thought leader for housing and CEO of Zelman & Associates, said:
“The likelihood of us having a foreclosure crisis again is about zero percent.”

Share:

Facebook
Pinterest
Email
Print
Picture of Mark Hughes

Mark Hughes

Mark Hughes is the President and curator of Bungalows and Cottages LLC, Blog, and Networks. Mark's mission is to bring the design, history, and lifestyle of smaller comfortable iconic American bungalows and cottages to everyone. Mark is a real estate broker, manager, and coach, and industry executive who once ranked in the top 1% of agents worldwide for sales and has sold or managed over 6 Billion in U.S. real estate sales. Small Home, Big Life.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top

Get The Newsletter

By subscribing you are agreeing to our Terms and Conditions & Privacy Policy

Leslie Heindel

Leslie is our Bungalow and Cottage expert in

New Orleans, Louisiana.

Mike Dobbs

Mike covers the West Side Los Angeles Market for Bungalows and Cottages.

Bungalows and Cottages Logo

Expert Agent Connect

Connect with your local B&C expert to find, understand, and secure your next dream home. We’re here!

Or Call our Call Center at 941-275-2630

*By proceeding, you consent to receive communication at the
number you provided, and email, from bungalowsandcottages.com and
real estate professionals and their network of service providers about
your inquiry and other home-related matters. Msg/data rates may
apply. This consent applies even if you are on a do not call list and is not
a condition of any purchase.

Bungalows and Cottages Logo

Dakota Feroleto

Dakota covers the Southern California Desert Region for Bungalows and Cottages which includes Palm Springs, Rancho Mirage, Palm Desert, Indian Wells, and La Quinta.

Ken Riel

Ken covers the Charlotte North Carolina Market for Bungalows and Cottages which includes Plaza Midwood, Elizabeth, Chantilly, Wesley Heights, Dilworth, NoDa, and Wilmore.

Karen Barks

Karen covers the Portland Oregon Market for Bungalows and Cottages from Beaverton and West Portland to the North and Northeast neighborhoods.

Chris Zoller

Chris covers the Tamp Florida Market for Bungalows and Cottages from Hyde Park, to Ybor, Seminole Heights, Historic Kenwood, and all around town.

Contact Chris:
941-275-2630
chris@whttampa.com
or Send A Note:

By sending you are agreeing to our Terms and Conditions & Privacy Policy

Jen Berbas

Jen covers the Austin Texas Market for Bungalows and Cottages from Downtown, to Old West Austin, Chestnut, Travis Heights, Rosedale, and all around town.

Mark Hughes

Mark covers the Los Angeles Market for Bungalows Cottages. Mark also serves as the liaison to the B&C Expert Partner Agent Network.  He loves Bungalows and Cottages!

Contact Mark: Call Center
818-480-2864
mark@bungalowsandcottages.com
or Send A Note...

By sending you are agreeing to our Terms and Conditions & Privacy Policy

Peggy Graef

Peggy covers the Orlando Florida Market for Bungalows and Cottages from Colonialtown, and College Park to Winterpark, and Thornton, and all around town.

Will Flannigan

Will covers the East Los Angeles Market for Bungalows Cottages. 

Amanda Rose

GA Lic#243859

Amanda covers the Atlanta Market for Bungalows & Cottages. 

Laird Bunch

Laird is our B&C local expert agent for Delaware, Maryland and Southern PA.

Thomson Meeks

Thomson covers the Asheville Market for Bungalows Cottages.

Contact Thomson: Call Center
818-480-2864
or Send A Note...

By sending you are agreeing to our Terms and Conditions & Privacy Policy

Submit Your BnB

Fill in your BnB details and we’ll review it for addition to our growing map of Bungalow and Cottages BnB’s.

*By sending you are agreeing to our Terms and Conditions & Privacy Policy.

Shannon Praetorius

Shannon covers the Seattle Market for Bungalows Cottages. Connect with Shannon here to find your best B&C Market guidance.

Contact Shannon: Call Center
941-275-2630
or Send A Note...

By sending you are agreeing to our Terms and Conditions & Privacy Policy

Anne Jensen

Anne covers the Los Angeles Market for Bungalows and Cottages along the south city side and LA’s southern coastal areas.

Contact Anne:
Call Center 818-480-2864
or Send A Note...

By sending you are agreeing to our Terms and Conditions & Privacy Policy

Judy Hughes

Judy Hughes is a Orange County, CA sales expert and accomplished renovation consultant.

Call or text Judy at 562-972-0491
or send a note...

By sending you are agreeing to our Terms and Conditions & Privacy Policy

Kathy Engen

Kathy is our B&C local expert agent for Edina MN. RE/MAX RESULTS

5201 Eden Avenue, Suite 100 Edina, MN 55436

John Staab

John is the Managing Broker and accomplished real estate consultant for Motive Real Estate Fort Worth Texas. Lic #0525982

Ken Farah

Ken covers the San Diego County Region for Bungalows and Cottages.

Alex Fotouhi

Alex is our B&C local expert agent for Seattle Washington.

Steven Lambert

Steven is our B&C local expert agent for the Tri-Cities in Washington.

Bungalows and Cottages Logo

Agent Lead and Referral Network

Realtors® Fill in your details to join our growing exclusive B&C Lead and Referral Network and we’ll get back to right away.

*By sending you are agreeing to our Terms and Conditions & Privacy Policy.