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“The relatively small number of seriously delinquent homeowners are working with their mortgage servicers to find foreclosure alternatives, including loan workouts that allow for home retention,” Walsh said.
In line with MBA’s latest forecast calls, Walsh stressed that a recession may come in the first half of 2023, driven by tighter financial conditions, reduced business investment, and slower global growth. Consequently, the unemployment rate is projected to reach 5.5% by the end of next year, almost two percentage points higher than the estimated 3.7% rate in October 2022.
“The delinquency rate will likely increase in upcoming quarters from its current record low because of both the anticipated uptick in unemployment and the effect of natural disasters like Hurricane Ian in Florida, South Carolina, and other states, which will likely result in an increase in forbearance agreements to allow impacted homeowners to get back on their feet,” Walsh said.
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