Forbearance: Two Million Residential Home Loans in Limbo to Start in 2021
Over 3.5 million residential home loans were 90+ days defaulted in 2020 – the largest number in one year since 2009. Over two million homeowners remain seriously delinquent on their mortgage payments. The public isn’t seeing this in the news for several reasons, one of which is the loosening of TDR and CECL reporting requirements at major financial institutions. While the media reports loans coming off forbearance, very little is being addressed about the more than 1.5 million home loans expected to be seriously delinquent when the next wave of active plans is due to expire in March. Bill Bymel is a pioneer in distressed note space. He literally wrote the book, WIN WIN REVOLUTION, which details his decade of personally overseeing the purchase and resolution of more than a quarter billion dollars of equity investments in this secondary market.
- As of mid-January, more than 2.7 million homeowners remain in active forbearance plans, with that rate of improvement slowing in recent months as well
- At the current rate of improvement, when FB plans begin to expire in March, there will still be approximately 1.5 million more serious delinquencies than pre-pandemic
- Based on the average improvement from June 2020 through January 2021, there could still be more than 2.5 million active plans at the end of March
- More than 600,000 active forbearance plans expiring March 31st represent a significant unknown in terms of borrowers’ ability to resume making mortgage payments
- The share of borrowers in FB plans making mortgage payments has fallen to just 12%, suggesting a population that may well face an extended challenge in getting current
Event Recording
Forbearance Two Million Residential Home Loans in Limbo to Start in 2021
Speaker
Bill Bymel
- Title
- Managing Partner
- Role
- Speaker
With over two decades of experience in real estate, Bill Bymel has become known as a pioneer in the distressed debt space by creating a new paradigm for dealing with delinquent borrowers on residential real estate. His strategies and experiences personally overseeing the resolution of $250 million of NPL since 2009 are illustrated in Bill’s book WIN WIN REVOLUTION. Bill spent the last decade as a Senior Director, Signatory at Spurs Capital, a leading mortgage investment firm based in New York City. He recently founded First Lien Capital LP with a focus on NPL opportunities in both residential and small balance commercial real estate. As a Partner in Retail Sites International, a 40-year-old commercial real estate advisory firm based in South Florida, Bill’s clients included McDonalds, BJ’s Brewhouse, Darden Restaurants, and Family Dollar Stores. RSI Asset Management, founded in 2009, acts as a third-party asset and property manager for private equity funds or family offices that invest in Florida. He is a graduate of New York University, currently residing in Beverly Hills, California.
About
First Lien Capital LP
First Lien Capital LP is a newly formed partnership that will focus on opportunities in distressed real estate, both residential and commercial. The strategy is focused primarily on United States residential real estate assets via diversified allocations in first lien non-performing and sub- performing mortgage notes purchased at a discount (NPLs).
The Founding Principals have a multi-decade track record focused on investments in seasoned residential mortgage whole loans as well as the redevelopment or repositioning of single family residential, retail, and multi-family assets.
Our NPL purchase strategy was created to address current and forthcoming dislocations in the residential whole loan and structured products market. With looming market corrections on the horizon, First Lien Capital is well-positioned to capitalize on opportunities in both the secondary mortgage market and distressed real estate centers throughout the United States.
The mission is to provide solutions to both financial institutions and borrowers currently under stress. Make a positive contribution to the resolution of troubled loans and the eventual re-emergence of a stronger, healthier mortgage and real estate market. For financial institutions, FLC provides liquidity with a transparent investment approach that includes best-in-class pricing and models as well as highly proficient experience in servicing oversight that will produce exceptional asset performance. For borrowers, we bring industry-leading expertise to help those facing financial challenges with opportunities to restructure their mortgages in a way that makes economic sense, a true win-win.