"One of the mistakes I made regarding the credit side is that I genuinely believed we would have already returned to pre-COVID-19 levels of foreclosures by now. Fortunately, that has not been the case. Some might argue that the delays in the foreclosure process have contributed to this outcome. Still, I would focus more on the credit quality of homeowners, the absence of a recession and the substantial amount of equity people have in their homes."
"A significant difference from the marketplace of 2007-2011 is that current homeowners already have a substantial amount of home equity. The down payment percentage data are at 21st-century highs today, where, during the housing bubble crash years, over 23% of the homes in America were underwater. Now it's not an issue at all. Additionally, the loan-to-value ratio was around 85% during the years of the housing bubble crash; currently, it stands at 44.2%."
"We had many distressed home sellers back then, which is no longer the case. In fact, we haven't experienced such positive credit housing data with the bulk of homeowners since the 1950s. As part of the data released by the New York Fed, we can see the updated FICO score data for U.S. homeowners. I have to say, nothing looks better than the chart below. The majority of homeowners in this data pool have FICO scores of 720 or above, and this has"
Foreclosure levels have not returned to pre-COVID-19 levels. Delays in the foreclosure process may have helped, but stronger homeowner credit quality, absence of a recession, and substantial home equity are more significant factors. The housing credit market that broke during 2005–2008 differs markedly today. Down payment percentages are at 21st-century highs, and over 23% of homes were underwater during the crash years—an issue that no longer exists. Loan-to-value ratios fell from around 85% during the crash to 44.2% today. Most homeowners have FICO scores of 720 or above.
Read at www.housingwire.com
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