Preparing for Another Economic Downturn


first_img Servicers Navigate the Post-Pandemic World 2 days ago Tagged with: Downturn Economy Forbearance Servicers Navigate the Post-Pandemic World 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago Previous: White Paper: Self-Governance Critical for PLS Industry Next: The Industry Pulse: Mortgage Leaders Donate for COVID-19 Assistance The Best Markets For Residential Property Investors 2 days ago fcd1aa2d-5b26-4754-ab6b-8342360620f8The economy is set to bounce back, according to Bloomberg, however, as key pillars of economic support are set to go away we could have another downturn toward the end of the summer.The big test for the economy will come at the end of June, according to Bloomberg. Much of the support for the recent recovery has come from programs put in place by the Federal Reserve, Congress, state governments and banks to provide relief for consumers, homeowners, and businesses. Some, however, are scheduled to phase out soon.This includes some regulations aimed at protecting homeowners, including forbearance requests. States such as California worked out deals with banks in late March to provide 90-day grace periods to homeowners when it comes to paying their mortgages. If not extended, those too will expire at the end of June. Those grace periods are providing support not just to households struggling to pay bills, but also to the housing market by keeping borrowers who can’t pay their mortgage from having to sell their homes or face foreclosure. If mortgages come due in July and borrowers can’t pay, that could lead to the kind of plunge in the housing market that so far has been averted, Bloomberg notes.Forbearance requests have begun to slow, according to data from Black Knight, but there is a risk of May-related forbearance activity changing that trajectory.As Black Knight Data & Analytics President Ben Graboske explained, the rate at which American homeowners have been seeking mortgage forbearances began to slow from the middle of April forward, and Black Knight will monitor this trend to see if it continues.“After surging at the beginning of April and then rising again near the April 15—when most mortgages become past due and late fees are charged—the number of new forbearance requests has declined in recent weeks,” said Graboske. “While total forbearance volumes continue to mount, daily inflow has begun to taper off. Between 53,000 and 102,000 new plans have been put into place over each of the last nine days, and even the largest single-day volume was less than a quarter of what we saw at the start of April—and may see again next week. What remains an open question at this point is to what degree forbearance requests will look like at the beginning of May—when the next round of mortgage payments become due, and with nearly 30 million Americans newly unemployed in the last month.” Downturn Economy Forbearance 2020-05-07 Seth Welborn About Author: Seth Welborn May 7, 2020 1,547 Views Home / Daily Dose / Preparing for Another Economic Downturn Demand Propels Home Prices Upward 2 days ago  Print This Post Related Articles Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer. Governmental Measures Target Expanded Access to Affordable Housing 2 days ago in Daily Dose, Featured, Market Studies, News The Week Ahead: Nearing the Forbearance Exit 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Preparing for Another Economic Downturn Share Save Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Sign up for DS News Daily Subscribelast_img read more