Jacqueline Larkin was quoted in the Philadelphia Business Journal article, “What’s next for mortgage lenders, borrowers after foreclosure moratorium ends,” on August 3, 2021.
Jacqueline, a Partner with the firm, represents creditors and lenders in bankruptcy matters, foreclosures and collections. The article discusses the moratorium that ended July 31 and considers whether it could lead to another mortgage industry foreclosure crisis similar to what we experienced from 2008 to 2010.
In the article, Jacqueline expressed her concerns about foreclosures picking up after temporary rules put in place by the Consumer Financial Protection Bureau (CFPB) will halt many foreclosure proceedings through the end of this year.
The CFPB in late June amended federal mortgage servicing regulations to establish temporary special safeguards to help ensure that borrowers have time before foreclosure to explore their options, including loan modifications and selling their homes.
Jacqueline said the CFPB rules will temporarily stave off some foreclosures but it could simply delay the inevitable increase in filings.
“I think you will see foreclosures that were in place before March 2020 start to pick up now,” Larkin said. “And as we get closer to December, you will start to see more of them that entered forbearance after the pandemic started. I think you can hope for the best with the strong demand in the mortgage market and the low interest rates. But you could see issues in the first quarter. The bubble could pop if things are not done correctly during this period.”
The moratorium was put in place last fall to help those struggling to make rental and mortgage payments due to loss of income from Covid-19 restrictions. It had been set to expire on June 30, but the White House and Centers for Disease Control, extended the freeze until July 31 with the hope that it would be able to accelerate the pipeline of rental assistance. Just recently, the CDC has issued a moratorium on evictions for tenants in order to allow the states, tenants and landlords to have time to access the available federal funding.
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