Coronavirus Mortgage and Real Estate Crisis of 2020

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NewbieFed

LoanSafe Member
Jun 6, 2011
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To Both of you, there is no shame in being sold an Interest Only, Option ARM or Pick-A-Pay Loan. While we may have been slightly over our heads... one has to remind themselves that the entire industry was pushing these loans as safe, sound, reliable ways to finance homes. It's not our fault, we bought into that. I don't blame myself, and neither should you.

Regardless, I do have a theory and some advice for both of you. One thing that is clearly apparent, is that Millions of People are currently in forbearance on their loans, with no apparently way to catch up -- short of a lottery ticket. Congress seems realize this, and if you ask me, I would put money on it -- that a new version of Making Home Affordable / HAMP, is on the way. You've got millions, and millions (apparently close to 15 Million) loans that are at risk of falling into foreclosure, and few homeowners are going to be able to catch up.

And... if that first version of the program does not come into fruition, than something far worse than 2008 - 2009, is going to hit next. The wave of defaults & foreclosure inventory be so far and wide, that it's my personal believe that we will see home prices fall in some areas to values not seen since 2001/2002.

If that were to occur, you would have people who could willingly pay their loans, but decide not to anyway. Congress, once again, would come together, in my opinion, and formulate some sort of housing market/mortgage bailout.

My advice is personally this -- I've put all my mortgages that I can into forbearance, and I have been stashing the cash (the monthly payment) into a Savings Account. Since Mortgage Servicers are not reporting accounts in forbearance to credit bureaus - the ill effects of this are basically none. However, there are some significant upsides -- if these companies, or a new law goes into effect.

@NewbieFed, I think you should call Mr.Cooper and ask for copies of your loan modification agreement. I would bet that you have a "step rate" modification, instead of a revert to an Adjustable Rate. If this is the case -- your loan will adjust two a rate, two points above what you are currently paying, at a designated time. However... if your loan is simply converting back to a Adjustable Rate -- you need to ask, and understand what the Margin Is and... what Index the Loan is on.

MR COOPER just posted a new video regarding help for those MR COOPER customers during the COVID-19 Epidemic. However, they gloss over us non-Government backed mortgages!

 

FedUp02

LoanSafe Member
Apr 26, 2009
997
110
43
I did not know where to post this, but, I just wanted to wish a Happy Mothers Day to all of the mothers here in Loan Safe.

FedUp
 

just_me

LoanSafe Member
Sep 14, 2015
643
63
28
Odds of him still being in office to clean up the mess are slim

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In other words, hold on to your seat until Feb 2021. I can say an administration change would definitely be locked and loaded. Better to have a rolling late than accrue full 6 mo's late status and move into foreclosure. You are generally protected in a judicial state (you get notice& can answer) but non-judicial states, like California, will have surprise foreclosures (you get a letter-or not). Some homeowners will be saved by pandemic-related court delays. I can see courts closing again later this year and possibly a foreclosure moratorium for 1-3 months. It's gonna be a hell of a roller coaster ride for some. We don't even know what Congress will look like by the end of summer. We could lose a few people which could tilt gov either way. I think this time, their are enough people that have learned from past recovery mistakes that hopefully this recovery will include the UBI which will prevent a large portion of the foreclosures from happening in the first place.
 

Moe Bedard

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Staff member
Loan Safe Mortgage
Aug 10, 2007
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Short-term rental market faces consolidation as start-ups and small landlords offload properties
PUBLISHED SAT, MAY 30 202010:54 AM EDTUPDATED SAT, MAY 30 20206:23 PM EDT

Salvador Rodriguez@SAL19



KEY POINTS
  • Venture-funded companies and mom and pop businesses in the short-term rental market are offloading properties in an effort to cut their losses after the coronavirus dramatically curtailed travel.
  • Other companies in the short-term rental market that are hopping on the misfortunes of their peers to expand their own portfolios.
Read more @ https://www.cnbc.com/2020/05/30/short-term-rental-market-faces-consolidation-as-airbnb-owners-scramble.html

Moe's commentary - And then gluttony of homes come onto the market that people cannot afford to buy equates to excess inventory and price slashing and subsequent foreclosure for these homes they are no longer able to pay for.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,854
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Southern California
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Freddie_Mac_And_Fannie_Mae_Extend_Ban_On_Evictions_And_Foreclosures_Until_June_30.png

The Federal Housing Finance Agency, which oversees the government-sponsored mortgage buying companies, Fannie Mae and Freddie Mac, announced today an extension of the federal halt on evictions and foreclosures.

The moratorium is now to last until at least June 30. It was poised to expire this Sunday.

“During this national health emergency, no one should be forced from their home,” said FHFA Director Mark Calabria. “Extending the foreclosure and eviction moratoriums protects homeowners and renters with an Enterprise-backed mortgage and provides certainty for families.”

The ban on evictions and foreclosures pertains only to properties with government-backed mortgages, which make up about 70% of all home loans.

 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
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Southern California
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This news is just about 90 days after I created this thread warning that this exact thing would happen. However, it will be much worse than even I imagined. I predict 75% of U.S. homeowners will lose their homes in the next few years.

Mortgage delinquencies surge by 1.6M in April, the biggest monthly jump ever
Jessica Menton
USA TODAY

Delinquencies among borrowers for past-due mortgages are soaring, a sign that Americans are struggling to pay their bills amid a wave of layoffs and lost income from the coronavirus pandemic.

Mortgage delinquencies surged by 1.6 million in April, the largest single-month jump in history, according to a report from Black Knight, a mortgage technology and data provider. The data includes both homeowners past due on mortgage payments who aren’t in forbearance, along with those in forbearance plans and who didn’t make a mortgage payment in April.

At 6.45%, the national delinquency rate nearly doubled from 3.06% in March, the largest single-month increase recorded, and nearly three times the prior record for a single month during the height of the financial crisis in late 2008, Black Knight said.