For months, Foreclosure Mortgage Servicers, Mortgage Lenders, and Foreclosure Specific Law firm’s have been gearing up, scaling up, and preparing for a large influx of foreclosure activity on their book. This anticipated foreclosure boom has garnered the attention of Federal Regulators who want to avoid a repeat of the 2007-2010 Foreclosure Explosion.
According to Fitch Ratings, Foreclosure Mortgage servicers should expect an increase in regulatory scrutiny in 2022. With pandemic-related government forbearance programs expired, there are nearly two million mortgages in serious delinquency. Homeowners are now forced to transition into traditional loss mitigation alternatives or defaults. The foreclosure industry is about to hit it’s busiest peak since the real estate mortgage crash of 2007.
“The U.S. mortgage foreclosure industry is subject to extensive federal- and state-level regulations, which rapidly evolved during the economic fallout from the pandemic amid the transition to more automated and remote business platforms,” Fitch said. “The Consumer Finance Protection Bureau has prioritized mortgage servicing oversight under the new administration.”
An increase in penalties, fines, and higher regulatory capital requirements could all be on the horizon. The possible reintroduction of the Federal Housing Finance Agency’s (FHFA) increased net worth, liquidity and capital requirements could be following the two years of record profitability.
Nearly eight million homeowners have engaged in some form of forbearance or loss mitigation programs since the COVID-19 pandemic started in March 2020. As of February 2022, nearly six million of these homeowners have exited these programs and are now back on track with their mortgage payments. These programs have played a key role in keeping the 30-day delinquency transition rate down; the rate fell from 3.4% in April 2020 to 0.7% in October 2021. April 2020 also was also marked as a peak period for consumer complaints against servicers.
Leaving nearly 2 million to deal with default and foreclosure actions. Roosevelt Law Center is the nation’s highest rated Foreclosure Defense law firm. It is important for all homeowners to be fully informed about the foreclosure industry, it’s power brokers, and major financial institutions. With knowledge, comes power. From power, comes the ability to dictate the best plan of action. Homeowners who are in default or in foreclosure, should take these 5 steps to protect themselves.
The national delinquency rate was 3.38% in December 2021, 10 basis points above the record low seen in February 2020. However, loans in active foreclosure were at an all-time low in December 2021. The rate of foreclosure stood at 0.24% with 4,100 foreclosure starts, 90% below levels seen over the same period in 2019 before the pandemic started. This 90% drop was due to the federal moratorium on mortgage servicers foreclosing during the pandemic. This Moratorium was lifted in October 2021. The CFPB mandated further protections for homeowners, on the mortgage servicers. These additional delays expired on January 1st, 2022.
Fitch is expecting foreclosure activity to pick up tremendously this year, which likely means additional regulatory scrutiny. The 90 day delinquency rate in December 2021 was twice what it was before the pandemic, but 30-day delinquencies were lower than they historically were due to an improving economic situation.
Based on the statistic from Fitch research, forbearance plans for non-prime, non-bank servicers, which peaked at 71% of all loan workout options in the first quarter of 2021, saw a 10% decline by the third quarter as homeowners exited the Pandemic forbearance agreements, while the number of loan modifications tripled to 19% from 6.6% year-over-year.
If you are a homeowner/borrower who is facing foreclosure action from your (mortgage company, their servicer, or their foreclosure attorneys) take action! You have rights, however you must exercise these rights. You can learn more about your options by visiting Roosevelt.Law. You can also view thousands of reviews, testimonials, and hundreds of video reviews on the law firm reputation page.