Early Predictions of Massive Foreclosure Wave Appear Wrong for 2022

When the pandemic began, and as it raged on, millions of Americans struggled with making mortgage payments. The nationwide moratorium placed on foreclosures helped millions save their homes from bank foreclosure. However, as many did not have to make mortgage payments for months on end, it led real estate and economic experts to wonder about the effect that this would have. Many speculated that the moratorium would only delay the foreclosure process for most, and once it was lifted there would be a huge wave of foreclosures. As Americans were compelled to once again make mortgage payments when the moratorium was lifted, it was believed that tens of thousands, perhaps hundreds of thousands of people, would not be able to afford the payments and would enter the foreclosure process. For nearly two years this “foreclosure tsunami” was predicted by real estate professionals and mortgage and economic specialists alike. As the moratoriums were lifted throughout last year, many braced for the impact of the wave of foreclosures to come in 2022. It seems, however, that these early predictions are proving to be unsubstantiated.

In 2021, foreclosures were basically non-existent. Nationally, there were only just over 151,000 foreclosures total, accounting for just 0.11% of all housing units in America. To offer a comparison, in 2008 at the height of the foreclosure crisis of the recession, there were nearly 2.9 million foreclosures, or 2.33% of all housing units. Pre-pandemic numbers paled in comparison to the recession years, but were still much higher than 2021. In 2019, there were nearly 500,000 foreclosures across the country.

Recent analysis of the market is showing that the moratorium, combined with federal assistance programs, mortgage servicing guidelines, and extended loan modification options available are all helping to  keep the foreclosure wave at bay. As all deadlines expire and all loan modification options are attempted, it is expected  that there will be a marginal increase in foreclosures before the end of the year, but nothing like what was initially expected. The economy moving in the right direction is also good news and will help prevent unnecessary foreclosures as well. This is great news for homeowners across the country who may have been on the bubble and fearing foreclosure during the pandemic. Real estate investors who were hoping to cash in on foreclosure deals will likely be disappointed in 2022.

The market for real estate deals in the Florida Keys will likely not see a boom in foreclosures either. As of January 2022, there are only a handful of Florida Keys foreclosures, and if the analysts are correct it will most likely stay this way for the foreseeable future.