No one could have anticipated the struggles we’ve all faced this year. The onset and spread of COVID-19 throughout the country has caused major disruptions across nearly all industries in 2020. While we have somewhat recovered from the initial shock of job losses in the spring, mass furloughs and layoffs have negatively affected millions of Americans—between February and August 2020, our nation lost nearly 11.6 million jobs. The mortgage industry has been severely impacted as well.
There has been a lot of market discussion associated with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and mortgages within that program. This program was created in March 2020 to assist with the delay of a foreclosure (or to avoid a foreclosure completely). As a result of COVID-19, many lenders offered relief under the mortgage forbearance act. According to data from the Mortgage Bankers Association, roughly 3.5 million homeowners are in forbearance.
While this temporary relief has helped millions of consumers get through the worst of the economic upheaval caused by the coronavirus in 2020, forbearance periods are currently set to expire at the end of the year. While Congress may choose to extend the CARES Act, or create other assistance programs to prolong the forbearance period, this is not guaranteed.
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