Forebearance Plan: Is it a big deal in the Albuquerque Real Estate Market?

Tracy Venturi:

Let’s talk about forebearance. I want to get to that topic. So that’s been a big topic.

Tego Venturi:

It’s a hard topic. Okay. It’s funny. I’ve, I’ve gone to the chiropractor. I went to the eye doctor in every time I end up just in the last few weeks and every time I end up talking about real estate, right. Oh, tell me about this and tell me once they hear my name.

Tracy Venturi:

I think it’s going to be this big deal. So if somebody is coming out of forbearance Tego,

Tego Venturi:

I wanna just talk about some stats, if I may I find me well, yeah. Picking up on your sarcasm.

Tracy Venturi:

No, no, I love it. That you would know stats.

Tego Venturi:

Well, one of the things that’s, that’s been, um, going on is, yeah. I mean, back at the beginning of the pandemic, there were over 5 million people that took a forbearance plan. And so what that means is they, they went to their lender and said, Hey, can’t make my payment because of COVID. And I need to just put a pause on my mortgage payment. So there was over 5 million. Well now we’re down to about 2.7 million. Again, we’re talking nationwide obviously. And that’s good. The thing is interesting is of those people that have come off of that program over 3 million, 52% of them just basically they’re paid up, right? They either started making payments or they refinanced, or they sold their home.

Tracy Venturi:

Or they continue to make payments while they filed for forbearance, because they weren’t sure if they were going to be able to keep paying their payment, but they were able to.

Tego Venturi:

You know, a lot of those people were probably people that took the forbearance plan thinking, eh, you know, we’ll just do it just in case, you know, it’s kind of, there was obviously, there was a lot of, um, a lot of mystery back in March and April of last year. And so people just did it. So, and the rest of those, not the rest, but a third of those, um, they basically just said, well, we’re going to work something out. So they’re actually working out something with the bank, a repayment plan. Yep.

Tracy Venturi:

That could be that whatever they didn’t pay, if they actually did skip some payments that they tacked it onto the end of their loan, or they’ve done sort of some sort of repayment plan that they can afford temporarily or, you know. So that’s upon exiting the forbearance plan. Another 33% have a repayment plan. 52% of them are paid in full. What about the other 15%?

Tego Venturi:

The other 15% are in, are in trouble. Right. They’re in some sort of loss mitigation plan. So either they’re basically not making their payments so they could either just sell their home if they got the equity or if they don’t have the equity, then you know, the very last thing would be, it would go into foreclosure.

Tracy Venturi:

Well, they could go to short sale first and sell their home. Right? So we, we negotiate with lenders on behalf of sellers that, ask them if they can’t afford to sell their home, because it’s not worth enough to pay off the underlying mortgage. We work with the sellers to negotiate, to have the lender take short, what they’re owed so that we can get the home sold versus going into foreclosure.

Tego Venturi:

I kind of erased short-sale from my mind, because back in 2009, 2010, we did a fair amount of them. And they were really difficult back then because the bank, there were so many of those properties, the banks weren’t geared up for it. Now it’s actually a, it’s a much easier process. So that’s, again, that’s one of those options for people that do find themselves, you know, in that, that group of people. I want to just one more comment I want to make, I think it’s important. The narrative out there has been that if you’re in all those people, the 2.7 million people that are still in forbearance, those are automatically going to be foreclosures and get dumped on the market. And we’re going to have this mass flow of homes coming on the market. And that is just not, what’s going to happen. Come March, April we’ll know because a lot of those plans will expire. And again, so people could, you know, they could just, if they’re financially able, they’ll just start making their payments and just move on. They’ll work it out with the bank.

Tracy Venturi:

Can I just add in there that, you know, New Mexico is behind the curve on people getting back to work because our restaurants just opened indoors at 25%. Right. But a lot of the country have gotten back to work compared to New Mexico. So we kind of think about New Mexico and how many people are still out of work because of our climate here. But you know, much of the country is back to work so that 15% will change. But go ahead.

Tego Venturi:

Well, and I just wanted to bring you into this conversation, but let me just, just follow up on that. So these people that are still going to be coming out, or if you’re one of them coming out of this forbearance plan, you’re not sure what to do. There’s, you know, there’s options. And so again, just assuming that just because somebody is in forebearance, it’s going to end up in foreclosure and be a bank sale, that’s just not true. There’s going to be people that have equity and can just sell or take the short sale option or you know, whatever it is. And so

Tracy Venturi:

I would say really have a private conversation with us to talk about the options, right?

Tego Venturi:

That’s exactly what I was getting to. So Tracy, you know, if somebody is in a forbearance situation, they want to know what their options are outside of what the bank is offering them,

Tracy Venturi:

Call us, let’s sit down, let’s have a private conversation, look at your situation and see how we can best help you with whatever direction you need to go.