July Mortgage Payments

[TXJIM]

There was a mortgage forbearance provision in the CARES Act. If people have a federally backed mortgage all they had to do is call the lender and ask for a forbearance. Depending on what federal program backs the mortgage they can defer payments for 90 to 180 days with various repayment options.

https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/mortgage-relief/

[Radar]

There was a mortgage forbearance provision in the CARES Act. If people have a federally backed mortgage all they had to do is call the lender and ask for a forbearance. Depending on what federal program backs the mortgage they can defer payments for 90 to 180 days with various repayment options.

https://www.consumerfinance.gov/coro...rtgage-relief/

I dont understand that CARES deal, a person can borrow money from the gubment at 3% for 30 years ? I heard tell of a real estate agent that borrowed 350k on the CARES act, and a few others borrowed 60 or 70k. What is it exactly?

[TeamAmerica]

Bury your head brother. For investors, you look for signs of opportunity. You can either bury your head or pay attention. It's not a sky falling kind of thread, just wondering why people are not paying.

I traveled the country during the pre 08 period and you could see things weren't right. Everyone was having a big party, buying pricey cars, multiple houses, etc on admin type wages. It was going to catch up with them. This market is different and mortgages are a harder to qualify for, so I just want to understand why we are seeing a difference between buying and default. Usually the fall hand in hand.

my intent was really to find out what the details were (okay maybe 1% was to be a smartarse). i'm looking for rental investments as we speak.

it is very important to note that 32% of mortgages were not missed as your post implied. there is a huge difference between mortgages and rentals. i found the info. this is from a survey, not from actual mortgage servicing or debt servicing records.

https://www.apartmentlist.com/research/july-housing-payments

it goes on to state per the link and survey 30% of June payments were not on time however "89 percent of respondents reported that they had paid their June bill in full as of the first week of July. This is consistent with the end-of-month payment rate for prior months." so that 30% in june is now down to 11%, i.e. timing is very important since this is just a snapshot survey.

mortgages have a much bigger impact on the overall economy because of the sheer size of dollars and fixed income bonds collateralized by them. rentals have much lower friction and can be re-rented (the eviction moratorium is already expired in some places).

i agree that we don't yet know the scope of the issue because of all the stimulus money still in the economy. we will see some of that roll off on 8/1 unless they pass another stimulus bill. i've pointed out in another post there is still > $100 billion in the PPP and unemployment numbers are falling each week.

so for now, time will tell, but i'm still calling this "32% of mortgages" fake news because the headlines are clearly sensationalized.

here is a better number to focus on for mortgages and some of our mortgage banker members should chime in as well as what they are seeing. "There are roughly 4.2 million Americans in forbearance plans, according to a recent survey published by the Mortgage Bankers Association."

https://www.foxbusiness.com/economy/one-third-of-americans-missed-their-july-housing-payments

[Budman68]

https://www.apartmentlist.com/research/july-housing-payments

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Lots of great info here. Thanks,

[tradslam]

Im good on almost all of mine. I have one property that stopped paying and I can’t evict and I have to pay there electric on top of it...... thanks to the Governor of Michigan.

[Jon B]

I bet this ^ is probably the bulk of the problem. I've read many articles about the the Airbnb & VRBO "Super Hosts" that have leveraged themselves to the tits to buy dozens of houses have not had much, if any, traffic and are defaulting on millions in mortgages.

I am no super host but we lost a ton of $$$ in bookings for the AirBNB.

[JayB]

Im good on almost all of mine. I have one property that stopped paying and I can’t evict and I have to pay there electric on top of it...... thanks to the Governor of Michigan.

Dang...can you forward those payments on and have the Gov pick em up?

[TXJIM]

I dont understand that CARES deal, a person can borrow money from the gubment at 3% for 30 years ? I heard tell of a real estate agent that borrowed 350k on the CARES act, and a few others borrowed 60 or 70k. What is it exactly?

The CARES Act deals with multiple areas. The part you are talking about probably has to do with payroll protection. It allows small businesses to borrow a multiple of their total payroll, with the idea being that you will use the funds to pay your employees rather than lay them off due to lost income during Covid shutdowns. If certain provisions are met I believe the loans are eligible for forgiveness.