Covid delayed? Mortgage bailouts are expiring fast, but here’s why a foreclosure crisis is unlikely

This article explains it well - Extraordinarily high levels of home equity, thanks to the recent runup in home prices, has struggling borrowers in a far better position now than they were at the start of the pandemic.

There are still 1.618 million borrowers in forbearance programs (down from roughly 5 million at the peak in May 2020), or 3.1% of all outstanding mortgages, representing an unpaid balance of $313 billion. But 98% of those troubled borrowers now have at least 10% equity in their homes, not counting their missed payments. Including those payments, 93% still have more than 10% equity. Given today’s tight housing market, the majority could easily sell and still pocket some profit.

“Such strong equity positions should help limit the volume of distressed inflow into the real estate market as well as provide strong incentive for homeowners to return to making mortgage payments — even if needing to be reduced through modification,” said Ben Graboske, president of data and analytics for Black Knight.