Mortgage Delinquencies of At least 90 Days Rise To Highest Level In 10 Years

[appalachiablue]

Source: The Hill

Sylvan Lane, 8 hrs ago.

The number of serious mortgage delinquencies rose to a 10-year high in July, according to a report released Friday by financial data firm Black Knight. The number of homes with mortgage payments more than 90 days past due but not in foreclosure rose by 376,000 in July to a total of 2.25 million, according to Black Knight. Serious mortgage delinquencies are now at the highest level 10 years and have increased by 1.8 million since July 2019.

While the total number of delinquent mortgages dropped nearly 7 percent since June, the record rise of serious delinquencies is a troubling sign in the wake of the recent expiration of federal foreclosure and eviction protections.

The Coronavirus Aid, Relief and Economic Security (CARES) Act enacted in March imposed a ban on foreclosures and evictions until July 31. The Trump administration and lawmakers failed to reach a deal to extend those protections after they expired, and an executive order issued by President Trump to mitigate the damage may not be sufficient to protect all who are at risk of losing their homes, according to housing advocates.

The prospect of widespread foreclosures could pose a significant threat to the U.S. financial system, which has weathered the coronavirus recession with the help of unprecedented support from the Federal Reserve. If homeowners without jobs or their pre-pandemic earnings are unable to pay their mortgages, the wave of foreclosures could leave mortgage servicers on the hook for billions of dollars in payments owed to investors who hold bonds funded by those home loans.
A similar crisis led to the housing market collapse and financial crisis that kicked off the Great Recession. - More...

Read more: https://www.msn.com/en-us/news/politics/mortgage-delinquencies-of-at-least-90-days-rise-to-highest-level-in-10-years/ar-BB18f0N6

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- Also: 'Rise of the Suburbs, July Homes Sales Shoot to 14 Yr High: US Cities Seeing Their Fortunes Change'
https://democraticunderground.com/1016266623

[cstanleytech]

1. Seems like the sensible solution would be to pass legislation to help some of these people.

Something along the lines of a 6 months relief to pay anything for a mortgage for people that are behind due to job loss.
Would have to include some common sense things though like it has to be the only home they own and it has gone their sole residence plus a cap so the help is restricted to those with mortgage payments of 2500 a month or less.
As to how to pay for it probably some sort of long term tax credit to the mortgage holders so it's spread out over the next 20 to 30 years.

[Igel]

4. I've read a number of articles like this.

What I haven't seen mentioned is whether the delinquencies are just those who are actually behind on their mortgage or if the number includes the millions of homeowners who deferred some payments (effectively increasing the length of their mortgage).

If just the former, it's serious. If the latter's included, the news might be trivial or might be serious but the reporter isn't giving us the information needed to evaluate.

[cstanleytech]

5. Either way though it could be the help that might keep us

from descending into another major Republican Recession.

[Kenny955]

6. I believe...

Even if its deferred, you still have to pay in whole. So if you deferred 6 months, on month 7, they are going to want 6 months of payments plus the current payment that's due. Deferrals will most likely lead to foreclosures, homeowners are only buying time hoping for a miracle.

[appalachiablue]

7. That sounds correct but I'm not positive. Welcome to DU.

[melm00se]

11. The answer is not clear cut

It depends upon the deferral agreement.

the most common ones that I have seen (I used to work in the business) are:

Tacking the payment onto the end of the loan

So a 360 month mortgage with a 6 month deferral becomes a 366 month mortgage with 360 payments.

Deferrals that mimic a Chapter 13 payment plan

Take the deferred months, divide the deferred dollar amount by an agreed upon number (like 24) and the mortgage payment is increased by that amount for a specified period of time.

IOW, 6 months is deferred. Mortgage payment is $1000/month so $6000 is deferred. The $6000 is then spread over a 24 month period. $6000/24 = $250. The mortgage payment goes up to $1250 for the 24 months after the end of the deferral window and then after that period reverts back to the $1000. (Please note that I chose these dollars and terms to make the math easy).

There are a myriad of others that pop up from time to time.

Despite what a lot of folks believe, banks do not want to foreclose. It is a colossal, time consuming, not to mention expensive PITA.

[not fooled]

2. red don's cronies licking their chops

at the prospect of hoovering up more single family homes in order to rent them back to their former owners at inflated prices.

I'm convinced mnuchin et al. made sure there was no more mortgage or foreclosure relief in order to create large numbers of foreclosures that they could swoop in and purchase.

[appalachiablue]

8. The way it usually goes sorry to say. Although I think

FDR's admin. worked out smthg,, or tried to when he got in office.

[blue-wave]

3. We must

elect Biden in November. Our country will not survive another four years of this mess. Putin is laughing his ass off. Let's wipe the laugh off of his face.

[appalachiablue]

9. Correct on that, much more and we're lost

[MissMillie]

10. Coming soon to a bank near you...

...ANOTHER BAILOUT!