
Mortgage delinquencies will exceed Great Recession levels - DyslexicAtheist
https://www.marketwatch.com/story/mortgage-delinquencies-caused-by-the-coronavirus-will-exceed-great-recession-levels-according-to-this-forecast-2020-05-13
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noad
I stopped paying my mortgage 14 days ago for the first time in my life. I was
lucky enough to get a deferral, and I now have the massive triple payment due
date looming in August with no idea of how to pay it.

Best job currently seems to be delivery driver at $16/hr. There is absolutely
no way I will avoid homelessness unless things change significantly, and soon.

I have an engineering degree from a good school, I played by the rules, I
worked hard. Doesn't seem to matter much. The joke around here is that the
$1200 check is enough money to buy a really nice shotgun to kill yourself
with.

~~~
mannanj
From this response it seems like one big problem for most people is a lack of
clarity around and education for what options are really available to us. I
consider myself pretty educated and even I can't figure out that the mortgage
loan may be deferrable or extended to end. It was refinanced before, but is it
federally owned? Can it be extended after the 3-months or is it all due at
once? IDK. Where do I go to find out? Is it an online forum like this one, and
if so, why is it that hard? Most people wont have that luxury.

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elliekelly
I’ve been thinking about building a “what are my mortgage options” type of
tool for this reason. I’m a banking attorney who can code enough to be
dangerous but I worry there are too many variables for my self-taught coding
skills to handle. If anyone with a complementary skill set would be interested
in building it with me (free, open source, no data harvesting, etc.) I think
it could be useful to a lot of people.

Edit: I’m decently knowledgeable with MEAN/MERN, Django, and Swift. I’m less
practiced but still (mostly) capable with Rails and Go. SQL and I are
frenemies but I’m working on it.

~~~
grogenaut
Just creating a decision tree based on your understanding would help a lot. A
programmer would need this anyway. This can be in text format

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JoeAltmaier
For decades, lenders have been preaching "don't pay off your mortgage, borrow
against your house, its the best terms you can get". Now we see how that
backfires. If the mortgage is never paid off, the house is always at risk.

I know, most young people have decades to go on their house. But even _some_
equity can help if times are tough.

~~~
pmorici
Even with a paid off mortgage you are still going to owe property tax. Not
paying that ends in the same way as not paying the mortgage. So I wouldn’t say
home owners with a paid off mortgage are in a zero risk situation.

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itsspring
Yes, my property tax is roughly 9-10k annually.

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raiyu
The problems here are many.

There is no consistency in how loan forbearance will be addressed with
customers.

Allowing someone to not pay their mortgage for three months and then requiring
a balloon payment isn't really a solution for the crisis, and will just kick
the can down the road.

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pacetherace
I wouldn't be surprised if citizens sue governments for loss of housing. I am
not saying it was unwanted but if people are forced to shut down their
businesses, it is obvious that many of them will eventually default.

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segmondy
Might mean nothing, about 90% of mortgages are backed by Fannie Mae & Freddie
Mac (govt). The govt is now buying bond EFT so definitely will be buying
Mortgage Backed Securities and Fannie & Freddie are fine with tacking all
deferred payments to the end of the loans instead of requiring a lump sump
payment. It will take people losing their jobs and not being able to pay for
this to matter. If there's a fast V shaped recovery like some expect, then we
can expect a blip at best in the RE market.

~~~
klmadfejno
I'm trying to follow why this is fine. I don't know much about this stuff.

If you lose your job for 5 months, but get your loan deferred, won't you just
need to 6x the the normal payment once you get your job back? Granted most
loan terms won't end right when you get your job back, but I feel like many
individuals will not be able to keep up with their debt if they lose several
months of income. Is this fixing a problem or just delaying the realization of
losses so people don't go bankrupt right now?

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FireBeyond
That's the issue, while a lot of people are saying "Oh, you can get your
mortgage modified", a lot of lenders are saying "We're giving you three months
deferment. At the end of that three months, the next mortgage payment is due,
plus the three deferred payments".

~~~
segmondy
You have to make sure to ask for it to be added at the end of the loan and not
a lump sump payment due after the deferral. The interesting thing is that
these mortgages are parceled up and sold as bonds. So the investors require
payments. If I bought a 4% bond, I expect my 4% no excuses. I believe this is
why the govt is going to start buying bonds. There really is no such thing as
a free lunch.

