COVID- Govt. Forbade lenders on Foreclosures?

Question

What’s up BP Community!

So I was talking to my local Real Estate Agent and I was telling  her that I was interested in looking at Foreclosures/REO property’s I was recently approved for a 203k/Conventional HFAloan. and she said Because so many people’s ability to earn income was impacted by the stay at home order, the gov’t forbade lenders to foreclosure on anyone. That order hasn’t been lifted As the dust settles from COVID, we will start to see the distressed sales and foreclosures increase, unfortunately. Is this true information? My location is Northern California. Modesto California. Please advise and thanks to you all in advance!

Jonathon Nila · Answer

@Stephanie Simmons Great Information Stephanie I appreciate the feedback and will continue analyzing properties in the meantime!

Stephanie Simmons · Answer

I'm a licensed agent in Florida and based on a class my broker did - we were actually seeing double digit increases in REO's in about 75% of major metro areas YOY before COVID.

I think anecdotally - middle class unemployment rates will probably be the leading indicator here.  If people miss 2-3 payments and then get loan modifications but are back to work at the same level of income - I don't think there will be a spike.  If we are seeing more than 90 days of inability of someone to work at a level of income they were at previously, then I believe we will have a spike.  With that said - depending on the state it can take a long time for the foreclosure to occur, the bank to take ownership, and then get it listed.  I'm thinking we will see some good deals between Thanksgiving and February 2021.