Written by Jason Kritzberg on December 22, 2020
Foreclosures are normally at a high. Just last year, in November of 2019 we saw an average of 50,000 foreclosures. You’d think that with the ongoing pandemic, job loss, and market crashing, we’d see an increase in foreclosures in 2020? Well, you’d might be surprised to read this! This year in November, we only saw around 10,000 foreclosures. So you might ask the question, “how is this possible?” Well, its all because of a big thing called the CARES act. Let me explain more.
What is the CARES Act?
The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, is a $2.2 trillion economic stimulus bill which was passed by the 116th U.S. Congress and signed into law by President Donald Trump on March 27th, 2020, in response to the economic fallout of the COVID-19 pandemic in the United States. The act also included a couple provisions to help homebuyers avoid foreclosure. This act has brought a substantial reprieve to struggling homebuyers.
One prevision that was under the CARES Act was forbearance, or the right to stop mortgage payments for up to 360 days. The other prevision was a federal moratorium on foreclosures for government-backed home loans. It has since expired but is still being backed by individual agencies, such as Fannie Mae. These reliefs are noteworthy as it has allowed homeowners to put money elsewhere and avoid foreclosure as most individuals are living on a savings account.
What Happens After CARES?
Will foreclosures just become a thing again after the CARES Act expires? We don’t know yet. The good news is is that lawmakers are working hard on a second CARES Act to give more stimulus to homebuyers; however, the notion that it will be ready by January 1st, 2021 is slim to none. After the year end, homeowners might be out of luck and might have to start back up with their loans. There’s a chance moratoriums may be extended to allow struggling borrowers to get back on their feet and avoid foreclosure. Time will tell and Stephen White Real Estate will keep you and your families updated throughout the process.
We know this year has been tough, but the holidays are here and we hope you and your family can enjoy some relaxing time away from the computers, smartphones, and news. Everyone here at Stephen White Real Estate wishes you and your family HAPPY HOLIDAYS & HAPPY NEW YEAR! If you are looking to buy or sell your home next year, give Stephen White Real Estate a call to get started!