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  • Writer's pictureMAREJ

Foreclosures in 2021

2020 was a year full of challenges brought on by COVID-19 and the global pandemic that swept the world. The pandemic hit hard across virtually every sector, and with it came changes to the landscape of foreclosures. Because of moratoriums and various forgiveness programs, foreclosures all but came to a halt in 2020. With the pandemic still surging and forgiveness programs expiring, many people are wondering if a flood of foreclosures is coming next and how that will impact both borrowers and lenders.

When the outbreak of the pandemic began, Freddie Mac (FHLMC), and Fannie Mae (FNMA) (collectively referred to here as Enterprises) imposed a nation-wide moratorium on foreclosures for their federally backed, single-family mortgages. Because of this, foreclosure numbers were down significantly in 2020. The number was down 15% from the prior quarter and down an astonishing 81% from the year prior. (

Even without the foreclosure moratorium, most borrowers who faced financial trouble were given the option of modifying their current loan. By modifying loans and adding payments to the back end of the term, borrowers were able to avoid defaulting. With the Enterprises’ foreclosure moratorium in effect through at least January 31, 2021, and predicted by most to be extended, the fate of many borrowers is currently unknown.

Lenders need not look too far in the past to remember what it is like to have an overloaded REO and special assets department. In an article written in 2009, Pew Research compared 2006 to 2008 foreclosure filings, “The number of homes in the United States with at least one foreclosure filing increased from 717,522 in 2006 (0.6% of all housing units) to 2,330,483 in 2008 (1.8% of all housing units).”


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