Debunking the Forbearance and Foreclosures Myths in 2021

Real Estate Agent with | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 228209

Debunking the Forbearance and Foreclosures Myths in 2021

Many homeowners had their lives turned topsy-turvy nearly a year ago with their economic stability, completely disrupted. In the beginning of the COVID pandemic, economic uncertainties were first and foremost in most American’s minds. The government very quickly responded to that angst, putting into place forbearance plans. They were available to homeowners who had experienced job loss and/or economic hardships, allowing them to remain in their homes, without making their monthly mortgage payments.


Some who signed up for the forbearance program, quickly rebounded and have since attempted to secure a mortgage for a new house and many to refinance their homes. Sadly, those who accepted forbearance are unable to refinance or secure mortgages.



The good news...

There is good news for those who were able to exit forbearance. Most homeowners must only make 3 consecutive payments AFTER exiting forbearance to be able to refinance.

**Note: I am not a lender so, please check with your lender to confirm that this applies to your mortgage.


Nearly three million American households are actively in a forbearance plan. While 1/3 of those in forbearance have continued to stay current on their mortgage payments, many have not. According to CoreLogic, 39% of those who accepted forbearance are 150+ days behind; fewer than 25% who are actively in the forbearance plan are 180+ days past due.



The better news…


When you compare today’s homeowners who are behind on their mortgage to 2006-2008, that number is really a drop in the bucket. The housing crisis during The Great Recession does not even remotely compare to today’s housing market.


Michael Sklarz, President at Collateral Analytics:

“We may very well see a meaningful increase in the number of homes listed for sale as these borrowers choose to sell at what is arguably an intermediate top in the market and downsize to more affordable homes rather than face foreclosure.”




Delinquency alone is not enough to send a mortgage into foreclosure. Pundits who speculate that massive foreclosure is right around the corner, are not taking into consideration, the equity of the homeowners who are in forbearance. If push comes to shove, a large majority of those homeowners can sell their home to avoid foreclosure - and no, not short-sale it - sell it and cash out! 


Many homeowners in distress have the option to tap into their equity to use until their economic strife improves. OR, instead of participating in the forbearance program their bank offers, they can simply refinance and reduce their mortgage payments. This can help them avoid having to accept forbearance and thus, having that impact further/future financial challenges.


According to,“Nationally, the number of homes for sale was down 39.6%, (449,000 fewer homes for sale than last December).”


With the unprecedented lack of inventory on the market, the national market can easily absorb 500,000 homes this year, without home values depreciating. In the Charlotte Metro region alone, our inventory is down 55% - over 50,000 homes can easily be absorbed in our market.


*Data provided by Canopy MLS, deemed reliable but, not guaranteed.

Bottom Line

Americans have suffered economic hardships in their lives - both personally and in business. The overall residential real estate market however, has overwhelmingly weathered the 2020 pandemic storm and will continue to do so in 2021.


© Debe Maxwell | The Maxwell House Group | RE/MAX Executive | | Debunking the Forbearance and Foreclosures Myths in 2021


Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Joe Jackson 01/22/2021 04:41 AM
  2. Esperanza Butler® 818 926 5425 01/26/2021 11:35 AM
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Greg Mona
eXp Realty - Scottsdale, AZ
Professional Real Estate Representation for YOU!

Thank you for straightening this out Debe Maxwell, CRS. There is so much misinformation out there, so it is nice to see in black and white (and some color too!) concise information on this subject. Thanks for sharing! 

Jan 22, 2021 06:53 PM #17
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Great post. I took forbearance for 3 months, cancelled it, paid it off and then set up to refi with no issues. Done properly, it's a non-event ...but a life saver when times were uncertain in April 2020.

Jan 22, 2021 07:00 PM #18
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Excellent post, useful and informative. However, those in forbearance will still be challenged to refinance, wouldn't they? Most IMO wouldn't qualify if they're unable to pay their existing mortgage, how will they pay to refinance? Selling is best option and renovating kitchens, bathrooms and flooring is essential for rapid closing. 

Jan 23, 2021 12:31 AM #19
Anne Corbin
Long and Foster - Lake Anna - Spotsylvania, VA
Serving Lake Anna & Central Virginia

Thankful we don't have a mortgage or student loan. 

Jan 23, 2021 07:21 AM #20
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

The upcoming months are going to be very interesting in so many ways.  Home owners with mortgage issues being in there as well.  In our state it won't be an issue until the courts open up again

Jan 23, 2021 08:20 AM #21
John Juarez
The Medford Real Estate Team - Fremont, CA

Great post, Debe Maxwell, CRS, and really good comments!

Yes, I too, have heard the cries of fear about future foreclosures. Yet, home values have grown strongly since the recession of a decade or so ago. Most homeowners have equity and walk away with cash rather than undergo foreclosure. Sure, there will be those whose financial problems will include foreclosure but that is always part of what is going on in real estate in any time frame.

Jan 23, 2021 09:52 AM #22
Scott Lawson
America's Home loans - Santa Rosa, Petaluma Mortgage Broker - Santa Rosa, CA
Mortgage Broker FHA, VA, refinance or purchase

Hi Debbie,


You just need to have the mortgage reinstated--no payment history is needed for a refinance. I've run into quite a lot of this in the last few months as you can imagine.

Jan 23, 2021 10:31 AM #23
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

I'm confused over this statement: While 1/3 of those in forbearance have continued to stay current on their mortgage payments, many have not. According to CoreLogic, 39% of those who accepted forbearance are 150+ days behind; fewer than 25% who are actively in the forbearance plan are 180+ days past due.

If they're in forbearance, how can they be "behind?"


Jan 23, 2021 10:48 AM #24
Monica Hill
RE/Max Associates - Wilmington, DE
the REALTOR to help you discover Delaware

Debe, Excellent post! I've listened to the arm-chair quarterbacks, listen actively to the experts, and am watching the market. Houses are selling FAST here in Delaware for more than asking price. It might be essential to make improvements in some markets, but here with such amazingly limited supply, houses sell without renovations. My listing this week (a charming but very dated home)... 105 in-person showings in 5 days, 2000 or so virtual showings, and 28 offers. List price was $260,000 which is about the average price here. Great additional insight by George, too.  

Jan 23, 2021 11:18 AM #25
Jim Paulson
Progressive Realty (Boise Idaho) - Boise, ID

I have seen an uptick in companies and associations that want me to come teach the Short Sale and Foreclosure Resource (SFR) Certification nationwide. They have updated their materials to cover this issue.  I will be doing a lot of research on this topic as well to see how most lenders are handling the forbearance.  If they would have just done it as a second and tacked it on to the end of the loan (even at a higher interest rate) that wouldn't  have been as devestating on some people.

Jan 23, 2021 12:31 PM #26
Brian DeYoung
also affiliated with Howard Hanna - Ithaca, NY
The Realtor with personal investment background

Really enjoyed the article, and the pie chart.


Jan 23, 2021 02:49 PM #27
Debe Maxwell, CRS | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Hi Marte CliffForbearance is when your lender/mortgage servicer allows you to temporarily halt your payments OR pay your mortgage at a lower payment each month. You will have to pay the halted payment or the reduction amount  back at a later date.

Some homeowners lost their jobs early in 2020 and have not yet returned to work. In that example, their mortgage payments have been halted for 180+ days. So, they are over 180 days behind. Remember the reduction or paused payment has to be repaid. 

Hope this helps, Marte!

Jan 23, 2021 06:05 PM #28
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Debe love it glad this got featured the word needs to get out.... my wish once in a while gets listened to:)Endre

Jan 23, 2021 08:48 PM #29
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse specialist

In June, I finally took possession of my neighbor's apartment - a condo board lien foreclosure. It took 11 years and 4 days from the initial default to finalize everything. I have buyers that ask me about foreclosures in Manhattan- and my personal experience highlights why buyers should move on hoping to find foreclosure deals. Even as a condo board owned foreclosure- it's not a fire sale. 

As to the health of the market- half my buyers are all cash. The other half- most are putting down 25-65%. A few put down 20%- but it's rare to come across buyers putting down less in my market.  While there will be a handful of distressed sellers, it's not a common thing.

Jan 24, 2021 06:58 AM #30
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good afternoon Debe Maxwell, CRS ,

So glad to see this excellent post featured. You have told the real story and this will be so helpful for so many! Such useful information and the comments are informative too.

Jan 24, 2021 12:13 PM #31
Paddy Deighan JD PhD - Vail, CO
Paddy Deighan J.D. Ph.D

I have been hearing about a wave of foreclosures for several years now....maybe it will happen but when experts keep saying it, eventually it happens and they all say "You see, I predicted this" LOL

Jan 24, 2021 07:09 PM #32
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

Good post about the stability of the market. The numbers & findings just don't bear out foreclosures come soon.

Jan 25, 2021 11:20 AM #33
Melissa Jackson
Century 21 Alliance Properties - Azle, TX
Helping You Make The Right Move

Great explaination with graphics of the market in your area. Recently I took the class for short sales and foreclosures. Don't think it will be as bad as earlt 2000's Hopefully homeowners can bounce back. Either way I want to be able to assist my clients.

Jan 26, 2021 10:08 PM #34
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

This is such a great post to understand the current forebearance situation.  Too many are expecting a big drop in housing prices. I'm just not seeing it!  Great information!

Jan 29, 2021 04:10 PM #35
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

Catching up on my reading - this is a great analysis of the whole picture - thanks!

Feb 18, 2021 08:07 AM #36
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