Foreclosures could spike in 2021

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There's a warning that hundreds of thousands of Texans could lose their homes.

Demand is high and home sales in Texas are up 11 percent year over year, but Dallas real estate attorney Rachel Khirallah says we're in the eye of the storm. She says we'll see a hundred percent increase in foreclosures in the middle of next year.

She says "we're expecting anywhere from 100,000 to 200,000 foreclosures in the state of Texas alone. In states such as Florida, California and Nevada we're forecasting a 200 percent increase."

She says too many people are delinquent on their mortgages. "Most of it has to do with the pandemic because people have lost their jobs or had a reduced income, and as a result had to request either a forbearance agreement through their lenders and once those expires their monthly mortgage payments are going to be due again. The stimulus bill is not going to help that piece of it at all. It's going to be a huge trickle down effect."

If your mortgage is backed by a governmental institution, you are automatically entitled as a homeowner to one of no monthly payments.

Khirallah says this situation won't be as abysmal as it was in 2008. The biggest problem then was homeowners were underwater in what they owed versus what the home was worth.

"We have enjoyed such an inflated housing market for quite some time that the values in people's homes have not gone down and this pandemic happened so quickly that there hasn't been time for the values to have decreased, so people have equity."

She advises that if you are behind and foreclosure is near, consider selling if you have equity in your home.  You won't get anything out of the home if it's sold at foreclosure.  She says if all this happens, housing prices will dramatically decrease next year.