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More People Jumped On The Not-Paying Bandwagon

A report from the Orange County Register. “Impac Mortgage temporarily shut lending operations and furloughed 333 workers due to market turmoil tied to the novel coronavirus. The Irvine-based company, one of the few non-traditional lenders that survived the mortgage collapse of the Great Recession, suspended lending as of March 30. Impac filed a layoff notice with the state on April 18 saying its employees were in ‘temporary layoff’ status. So-called ‘non-bank’ lenders and mortgage servicers have seen cash flows squeezed and mortgage investors scared off. These gyrations hurt a lender like Impac that made more than $1 billion in non-traditional mortgages — through both mortgage brokers and directly with its CashCall brand — in each of the past two years.”

“‘While mortgage markets may appear to be normalizing, the industry, most acutely for non-bank mortgage originators and servicers, continues to manage to the uncertainties of the various initiatives promulgated by the U.S. federal government, the Federal Reserve and other state and local governmental and quasi-governmental agencies relating to economic stimulus, mortgage principal and interest forbearance, liquidity and origination and servicing practices,’ an update from Impac stated. ‘Until the industry achieves clarity on these items, the company’s lending activities will remain on hold.'”

“The losses by lenders such as Impac put parts of the housing market at risk. It’s especially true in high-price markets like California where non-traditional lender — who can make larger loans to buyers with less-conventional incomes — have been a noteworthy slice of the homebuying business.”

From Bloomberg. “The wealthiest, most-reliable mortgage borrowers in the U.S. are hearing an unfamiliar word from lenders: No. The global pandemic has flipped the mortgage market upside down, turning the industry’s most-valued customers into risky bets. When the rich lose income and stop paying, costs for lenders are magnified because the loans — known as jumbos since they are bigger than most conventional mortgages — don’t have the government to backstop losses.”

“In Southern California, Damon Germanides, a broker at Beverly Hills-based Insignia Mortgage, said he is still closing a lot of loans. It’s just getting harder to get them across the finish line. A Los Angeles homebuyer he’s working with may fall short of qualifying for a mortgage, despite good credit and owning a business that’s doing well during the pandemic because it’s deemed ‘essential,’ Germanides said. The borrower was ready to pony up 20% of the home’s value for the down payment, but he now probably needs to offer 30%.”

“‘A month ago, he was a no-brainer,’ Germanides said. ‘Now he’s 50-50.'”

“Banks including Truist Financial Corp. and Flagstar Bancorp Inc. also have pulled back by limiting refinancings, suspending their purchases of new loans made by correspondent lenders or pulling short-term credit lines from smaller mortgage companies they fund that make jumbo loans. Much of this pullback is because investors who’d normally buy these loans no longer want them, said Stanley Middleman, chief executive officer of Freedom Mortgage Corp., one of the nation’s biggest home-lending companies.”

“‘Whether the assets are good or not good is irrelevant because there’s no liquidity to buy them,’ he said.”

From KAGS TV in Texas. “Bryan College Station is home to many students and local families as well. With people losing jobs and schools moving online, the housing market may face fluctuations different from what it is used to. While the demand for renting property may have slowed down, things look a little different on the buying side. ‘As of right now, I’m still seeing a very steady pace like last year and the year before,’ said 12th Mortgage Loan Officer, Summer Handy. ‘Here in the differences and challenges that we’re seeing is that we have extra hoops to jump through. With unemployment with the constant changing up of how many people’s jobs are affected, then we’re having mortgage constraints.'”

From Fox Business on Illinois. “Michael Jordan owns at least five homes, two of which are up for sale. The first home Jordan is selling is located in Highland Park, Illinois, just north of Chicago. The massive, 32,683-square-foot home is listed for $14.9 million. While the nearly $15 million price tag may sound expensive, it’s an almost 50 percent price cut from the original listing price of $29 million from when the home first hit the market in 2012, according to Zillow. Since then, the property has seen a few discounts to its current price, failed to sell at auction and moved brokers.”

The Wall Street Journal. “Many U.S. landlords whose commercial tenants are asking for rent relief due to the coronavirus pandemic are acquiescing, though some are asking for proof of financial strain before delaying or even forgiving payments. Real-estate advisers, property managers and lawyers say they are fielding inquiries from tenants, landlords and lenders about ways to strike rent- and mortgage-relief deals given the closures of nonessential stores and the resulting economic downturn.”

“‘At the end of the day, it still comes down to the landlord’s lender not wanting to see the property foreclosed,’ said Andy Graiser, co-president of A&G Real Estate Partners, a Melville, N.Y., commercial real-estate advisory firm. ‘The landlord wants occupancy. The tenant wants to do business; they don’t want to go out of business.'”

“Landlords of retailers are normally used to striking lease-restructuring deals, but landlords of other businesses aren’t, said Matthew Bordwin, principal and managing director at Keen-Summit Capital Partners LLC, a real-estate brokerage and investment banking firm. ‘More people jumped on the not-paying bandwagon than landlords anticipated,’ Mr. Bordwin said. ‘They are being overrun with non-payment of rents.'”

This Post Has 66 Comments
  1. ‘Whether the assets are good or not good is irrelevant because there’s no liquidity to buy them’

    There’s so much crater out there I’m going to have to do something about the posting rate. Stay tuned.

    1. Crater or freeze?

      Unfortunately, I see fair pricing for my neighborhood as down 75 percent from the peak. But I don’t expect people to sell for quite a while. I guess investors first, but only if the bank doesn’t give them a write down. But there aren’t many investors in the neighborhood.

  2. T$k, T$k … oh, thee pain$ of it all, can’t ya feel$ their $uffering$ … $ad. … land.lordy.$ad

    The Guardian:

    Landlord$ on the pandemic: ‘Everyone has an impre$$ion of us as rich and greedy’

    Poppy Noor / April 20, 202

    Ricardo Reis, who owns 16 propertie$ in Michigan, says there is a $tigma against landlord$, which means people are le$$ empathetic about their need$ during $uch time$.

    “Everyone has an impression of us as being rich and greedy. A lot of tenants will be thinking, how can they ask [us to pay] during this time? But in reality, there are costs involved,” says Reis.

    Many landlords say this class-warfare view – the moneyed landlord versus the renter – is misguided. Reis, who also manages properties on behalf of a property management company, says that renters are used to a faceless landlord and don’t realize that on the other side is a family looking to pay the mortgage.

    “Tenants have a misconception that landlords make a lot of money, because they think what they pay goes straight into the landlord’s pocket,”

    Reis believes most tenants won’t pay rent if they don’t have to, and so criticizes the government for leaving landlords with that risk by offering eviction moratoriums.

    Martin says it is the behavior of renters rather than landlords that should concern people at the moment.

    “What could be more greedy than withholding rent that you have the ability to pay? [You will] damage the entire housing market, push it towards collapse. To me, it’s incredibly short-sighted.”

      1. 🌊🙏💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵

        What’s the point?

    1. Pushing the market toward collapse? Sounds like that’s in the renter’s interest to do, maybe?

  3. When main.$treet $queals like wanker.non.banker$ & Wall.$treet.piggy$:

    More$, 💵💲More$,💵💲 & even More$💵💲!

    Per$onal Finance / $pending & $aving / The Margin$:

    84% of American(-$) say they need another $timulus check

    MarketWatch / Published: April 22, 2020 / By Nicole Lyn Pesce

    1 in 3 Americans fear the first $timulus check$ won’t $u$tain them for even a month. The coronaviru$ has hit income acro$$ all wealth bracket$.

    The coronaviru$👾 pandemic has dealt the globe a double-whammy since the end of 2019, sickening 2.53 million and killing 174,336 and counting worldwide, as well as wreaking havoc on financial market$.

    While millions of Americans are still counting the days until their stimulus checks arrive, many are already finding that the one-time $1,200 payment won’t go very far.

    The economic impact payments started to hit bank accounts last week, offering a much-needed cash infusion for some of the more than 20 million people suddenly out of work after the COVID-19 pandemic spurred mass layoffs as businesses considered “non-essential” have closed to fight the spread of the virus. About 80 million Americans were expected to get their payments the week of April 13, while others will receive theirs later this month and or later in the year.

  4. ‘Q: Are buyers in contract worried about completing their purchase? A: Some are worried and some have canceled – or are trying to – their contracts. Other buyers actually view this as an opportunity and are moving to close the deal.’

    ‘If you are in contract to buy a house and are considering canceling, be sure to talk it over with your agent and seek advice from a qualified California real estate attorney. Most believe that the shelter-in-place order is not grounds to cancel a contract. There may be other options as well.’

    ‘Q: What do sellers think about the situation? A: With people sheltering in place, all open houses and client showings have stopped completely, so the market is essentially on hold until the order is lifted.’

    ‘The local Multiple Listing Service ( has discontinued its “Days on Market” counters so that houses don’t appear as if they are on the market for longer.’

    Openly manipulating market data – check!

        1. Thanks!

          Houzz is certainly appealing to people above my standard of living. We had sheets covering our windows for several months until we could afford to buy Levolor blinds.

  5. Go Munchin! Print More$!, More$!, More$! & even More$!

    Don’t.$top! Don’t … $top! … Don’t!
    🌊🙏💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵💰💲💵 …

    Opinion: What could turn around this $lumping $tock market$: Big government check$ to familie$

    MarketWatch / Published: April 22, 2020 / By Nigam Arora

    Investor$ tend to get bulli$h when Congre$$ or the Federal Re$erve $teps in with $upport

    It could be that the $ub$idie$ from the government may ward off economic de$truction.

    And for $tock market investor$, the key que$tion is: “How will all of the exi$ting and potential new government large$$e affect the $tock market?”

    ? … Does the approval$ of ALL this legi$lation fund$ 📝require$ the $harpies $ignature 🖍of thee.🍊.jesus?

    1. Nobody could have seen it coming!

      And with California the first state in the nation with COVID-19 deaths and third state from the bottom in testing, it could be a LONG time before open houses see much foot traffic.

  6. “Wealthier buyers are proving to be just as likely to stop paying their mortgages. Approximately 5.5% of jumbo loans — 131,000 borrowers — have asked to postpone payments due to a loss of income, compared with 6% of all loans, according to Black Knight Inc.”

    Dont confuse “wealthy” with morons keeping up with the Joneses. Who are these wealthy folks needed loans to buy shacks? Cant you buy these with cash?

    1. Wealthy == “high income, no savings whatsoever”

      I know people like that who don’t even save into their 401K. But they have all the toys that show they’re “successful”. All purchased on credit, of course.

  7. I heard the following words spoken on a financial program on a Vancouver, Canada radio station in December, 2010.

    “Way more money has been borrowed than will ever get repaid”

    “Way more promises have been made by governments and so on than will ever be kept”

  8. “Impac Mortgage temporarily shut lending operations and furloughed 333 workers due to market turmoil tied to the novel coronavirus.

    Temporary, my a$$.

    1. Funny how the word “furlough” is making a comeback. A lot of people are going to learn that they were actually laid off, permanently.

      1. One of my sons is “furloughed” from his restaurant industry job. We’ll see if that industry ever returns to full capacity when and if California COVID-19 quarantine measures end.

        1. Does the work place have air.conditioning? Rumor has it that’s a forced vector pathway for 👾 distribution. (Did someone just sneeze!?) … yike$!

  9. “The wealthiest, most-reliable mortgage borrowers in the U.S. are hearing an unfamiliar word from lenders: No.

    Lemme guess: lenders are turning down the wealthy so they can underwrite more loans for working stiffs.

    No, you say?

    Then who is going to be buying overpriced shacks?

      1. They’re on the sidelines and ready to pounce like a tiger. The Chinese economy just finished a miraculous V-shaped recovery.

  10. “!” $alaried Executive$ i$ lo$ing the P.R. War$ to thee invi$ible.deeth.👾.muncher$

    “Walter, take off yer belt & $pank her!”

    Abigail Di$ney on Di$ney furlough$: ‘What the actual f—‘?

    By Jordan Valinsky, CNN Business / Wed April 22, 2020

    Abigail Disney, a fierce critic of out$ized executive compen$ation — particularly at Disney — slammed the company for failing to take care of its low-paid worker$ when bo$$es have been “collecting egregiou$ bonu$es for year$.”

    She has previously called former Disney CEO Bob Iger salary’s “insane.” Iger stepped down in February and was replaced by Bob Chapek. Iger remains Disney’s chairman. Last year, Iger made $47,525,560, which was 911 times the median worker’s pay.

    “What kind of per$on is comfortable with this???,” Disney tweeted, asking Chapek and Iger to reconsider their pay and return some of their money to the company.

    “Di$ney faces a rough couple of years, to be sure,” she wrote. “But that does not constitute permi$$ion to continue pillaging$ and rampaging$ by management.”

    The Walt Di$ney Co. announced earlier this month it’s furloughing employees “whose jobs aren’t necessary at this time.” The coronaviru👾 pandemic has forced a major chunk of Disney’s businesses to temporarily suspend operations, including its parks, resorts and entertainment productions. More than 75% of the company’s 223,000 employees work for the Parks and Products division.

    Ten$ of thousand$ of park worker$ fought for and won a $15-an-hour minimum wage in 2018.

    Abigail Disney doesn’t have a role within the company. She has previously blasted worker conditions at Disneyland and its pay.

    “I’m just a citizen who cares and I think that makes me free to say what I believe,” she said Tuesday. “But I am an heir. And I do carry this name with me everywhere. And I have a conscience which makes it very difficult for me to sit by when I see abuses taking place with that name attached to them.”

    1. I have a conscience which makes it very difficult for me to sit by when I see abuses taking place with that name attached to them.” So change your name, Abigail Disney

      1. Her father, from all accounts, would be appalled by what greedy corporate scum have done to his beloved Disneyland and its vision for a delightful, wholesome fantasy adventure for families.

        1. Once a company goes public and issues shares the former gregarious relationship between the founder and his employees is ceded as its responsibilities must shift toward profits.

          1. In my experience nothing is more cut-throat than an owner trying to get ready to go public or sell. He may have been gregarious earlier when hiring you, but when it gets down to that last couple of quarters before the sale that are going to set the price he gets, “business is business” and devil take the hindmost.

      2. It’s because of her name and familial connection to the founder and the corporation that her comments carry weight in the press.

    2. “Walter, take off yer belt & $pank her!”

      FWIW, when “Uncle Walt” ran the company, Disneyland paid it’s employees a living wage. When I was a college student in the early 80’s Disneyland was considered the ultimate summer job in SoCal because it paid well, double minimum wage. The competition for summer bus boy, trash sweeper and other menial jobs there was fierce.

      1. That said, with the parks closed indefinitely, I don’t see how they could keep everyone on payroll. Also, It occurs to me that while they were furloughed, they do get WARN protection, meaning they should still be getting paid for 60 more days.

      2. When I was a college student in 1969 I once helped unload a tractor trailer full of 80 lb bags of crushed limestone, bag by bag. At least the ramp from the trailer was downhill. $1.60 /hr wasn’t near enough pay for the pain and stiffness that followed for the next week or two. Then & there I knew I wasn’t cut out for that kind of manual labor.

        1. unload a tractor trailer full of 80 lb bags of crushed limestone, bag by bag

          You gotta build up for a while to do that all day. That’s why if we want Americans to pick strawberries we better hire 10x as many as we need. First because many won’t come back the second day, and second because it will take weeks before the ones who stay can do it well. But anyone who says we *can’t* do it is wrong and not paying enough.

          1. And you probably weren’t starting from zero if you were looking for that kind of work in the first place. That’s why basic training can’t get much shorter, too many are starting from zero and are just barely starting to get in shape after two months. They spend all of AIT after basic on remedial PT and the drill sergeants are just trying to get them over the line by the time all training is complete.

          2. When A.Lincoln was on the campaign trail he challenge anyone in the “audience” to come up & hold an axe horizontal in each hand & out.last him.

            Eye don’t recall iffin’ anyone out.beat ’em … eye don’t think so … pretty certain it was’nt a fella named: Jefferson Davis.

      3. (Think Walt might be knot liking what thee “Bidne$$.Prophet$” i$ a doin’ to folks makin’ ’em $ fer a hour to enjoy a 4 min$ amu$ement$ ride.)

        Knot to mention findin’ free “tip.monie$” that fell out of some kids pocket! $weep it right up…

  11. ‘More people jumped on the not-paying bandwagon than landlords anticipated,’ Mr. Bordwin said.

    The Fed and the corporatocracy’s hirelings on Capital Hill created moral hazard with the 2008 Wall Street bailout. In doing so, they hastened our national slide into Deadbeat Nation.

    Next up: the collapse. A people as morally and financially bankrupt as ‘Muricans lack the strength of character to make it through the adversity that lies ahead.

  12. Gold is on a tear as even the dullest of the sheeple are starting to figure out the Fed is going to debase the currency into worthlessness with its deranged money-printing and limitless “stimulus.”

    1. That’s why I am not overly concerned about oil’s recent excursion to the negative side of the zero bound. The “no atheists in foxholes” philosophy at the Fed suggests “higher than expected” future inflation as the least-bad way out of a humongous post-COVID-19 debt hangover. Higher nominal prices of physical assets like yellow and black gold will be a natural consequence.

      Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. … A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society.

      — Milton Friedman, The Counter-Revolution in Monetary Theory (1970)

    1. The Military Industrial Complex cannot abide cheap oil.

      Wasn’t it just a few years ago that they couldn’t abide expensive oil?

  13. 📰 Extra! Extra! read$ all about$ it! … More$ & More$ $olution$!
    (NO paperwork required!)

    Market$ / REAL E$TATE:

    Fannie and Freddie will now buy loan$ in mortgage bailout program$, in a bid to loo%en lending.

    CNBC / By Diana Olick


    The Federal Hou$ing Finance Agency announced that Fannie Mae and Freddie Mac will now buy home loan$ that go into the government’$ forbearance program just after they clo$e.

    Fannie and Freddie had not been doing that, and as a result, lending had tightened up dramatically.

    “Purchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending,” said the FHFA’s director.

    “We are focused on keeping the mortgage market working for current and future homeowner$ during these challenging time$,” FHFA Director Mark Calabria said in a release.

    Mortgage lenders, both bank and non-bank, sell most of their loans to either Fannie Mae or Freddie Mac, known as government-sponsored enterprises, or GSEs. Or, if they are backed by the FHA, they are sold to Ginnie Mae.

    It can take a few weeks after a loan closes for it to be sold. When the government’s mortgage bailout started just over a month ago, some loans that had just closed, but were not purchased yet, went into forbearance.

    The forbearance program allow$ borrower$ with economic hard$hip due to 👾 Covid-19 to delay monthly payment$ for up to a year. Those payment$ must be made at a later date. The CARE$ Act, which was signed into law late last month, does not require that borrower$ provide any documentation or proof of hard$hip.

    More than 3 million loans are already in the forbearance program. Because Fannie and Freddie wouldn’t buy the loans that had just closed, credit tightened up dramatically, making it harder to get a new loan for all borrowers.

    (But Vait, there’$ more$!)

    In addition, eligible loan$ will be a$$e$$ed an additional loan-level price adju$tment — 5% for fir$t-time homebuyer$ and 7% for non-first-time buyer$.

    “We welcome the change in policy that directs the GSEs to purchase most loans in forbearance,” said Bob Broeksmit, CEO of the Mortgage Bankers Association. “We [are] looking forward to working with FHFA and the GSEs to arrive at more appropriate pricing and broad coverage for all transaction types.”

    1. “Those payment$ must be made at a later date.”

      Is this where Unlimited Quantitative Easing will come into play down the road?

  14. What a disaster for luxury condos, nobody is going to be in a elevator and consider the high cost of dues, many are scared to use the workout facilities.
    Forget inviting friends to party in your brand new over priced condo with a view, the HOA says you will be limited to how many in a unit?

    1. Most of the amenities in these “luxury” apartments have been shut down in the name of social distancing, yet rents have stayed the same.

    1. The 16% who don’t ‘want’ must be really stoopido.

      Get what you can…that’s the only way in this good ol’ ussa.

      1. Me too! Have you filed for 2019? We haven’t and I’m wondering if despite extending the 2019 filing deadline they’re giving people time to file before basing payments on 2018 filings.

        1. I got mine last week. I haven’t filed 2019 yet, but the taxable income on my 2018 was below the number where clawback starts.

        2. I haven’t had a refund since forever, which means I will get a check in the mail, in July if Forbes is correct.

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