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You’re Not Going To Have As Many Overpriced Listings Out There

A report from the Washington Post. “For 13 years, Danny Catalanotto paid the more than $2,000 mortgage on his Bowie, Md., home on time every month. When work as a church organist dried up in mid-March, Catalanotto says, he expected his mortgage company to offer help. Instead, a large Texas-based mortgage-collection firm called Mr. Cooper said Catalanotto could defer his monthly payments temporarily but would have to pay it all back in one lump sum. ‘It could be $8,000 to $10,000 by then. How do you come up with that if you’ve been out of work?’ he said.”

“Steve Irish, who owns 11 rental properties in four states, is preparing for the worst. While many tenants in North Carolina have been able to keep up, those in Michigan, one of the states hit hardest by the coronavirus, are struggling. Only one of his six renters in Michigan paid full rent last month. One made a partial payment, $160. He estimates he could carry the cost of the missed rent for a few months, including covering homeowner association fees and maintenance costs. But floating renters could become unaffordable this summer when he will have to pay property taxes in multiple states, Irish said.”

“‘I am trying to be as helpful as I can be and still recover over time. I understand this is a crisis,’ Irish said. But ‘this is my retirement money.'”

The Times Herald-Record in New York.”Some landlords are relying on the rents to manage living expenses and mortgage payments, and they would likely face foreclosure if they fall behind for months, said Dickie Baxter, a real estate agent who represents approximately 20 landlords and 300 rental properties. One of his major concerns is some tenants use the moratorium as a reason to stop paying rents. ‘The landlords have a portfolio to maintain because for a lot of them that’s their retirement. Their kids are still going to college and their family members also got laid off,’ Baxter said. ‘A lot of the rental owners are also small business owners in the area who have been hit from every end.'”

“Chris Miller, of Walden, who owns several properties and a cleaning business feels increasing pressure to keep up with the payments after two tenants have stopped paying rents since March. He is operating his business with a reduced level of service while draining his savings to offset the loss. ‘It puts a lot of unwanted stress on me because I don’t want to fall behind on any bills. I can’t exhaust the fund that I have as I take care of my family,’ Miller said.”

From Realtor.com. “Amid the economic upheaval caused by the novel coronavirus, it’s become significantly more difficult to get one of those loans. As more Americans are getting furloughed and pink-slipped, lenders—ever mindful of the housing bust of more than a decade ago—are requiring higher credit scores and larger down payments.”

“Some have ceased making loans they consider riskier, such as those for self-employed borrowers and real estate investors; those that require lower credit scores and down payments; and those for larger amounts, such as jumbo mortgages. Or they may be jacking up fees to make the loans prohibitively expensive. The availability of mortgage credit dropped 16.1% in March—a clear indication that lending standards are tightening up, according to the Mortgage Bankers Association’s Mortgage Credit Availability Index. That’s the lowest level of the index since mid-2015.”

“Fewer lenders are offering jumbo mortgages during this crisis. That’s because for these larger loans, there’s more money on the line if the borrowers go into forbearance or default on their payments. ‘We did see a really rapid slowdown in that market,’ says Joel Kan, an economist at the MBA. ‘It’s harder to get a jumbo loan, and rates are higher.'”

From News 3 Las Vegas in Nevada. “Call it the ‘Covid Clause.’ The official term is the ‘coronavirus addendum.’ It’s an invention by the Las Vegas Association of Realtors, and it has popped up in housing contracts. Realtor Alberto Saab told us that with lenders tightening their requirements and sellers hesitant to put homes on the market, the clause is one way realtors are hoping to instill confidence in the housing market. Saab says this might be the right time to look, since prices are low and steady. “

“‘You’re not going to have as many overpriced listings out there,’ Saab said “We’ve had a lot in the past and I think it’s come to a realistic price point. So, if you’re a buyer, that’s great. Take advantage of it.'”

The Norman Transcript in Oklahoma. “Bryan Waldenville, Realtor and owner of Meraki Real Estate in Norman, said so far, business has slowed down some due to COVID-19. ‘The effects of the shelter-in-place order, as well as the crippled oil and gas industry, have diminished real estate activity, especially the luxury housing market,’ Waldenville said.”

“The biggest change for mortgage lenders, said Chris Doke, mortgage sales manager of Gateway Mortgage, is significant guideline changes for most programs, including adding flexibility to allow for safety precautions and changes in U.S. Federal Housing Administration loans. Doke said a lot of lenders stopped originating FHA loans or originated them at much higher interest rates because their capacity wouldn’t allow for their entity to close those and/or the need or desire on the mortgage back security market for entities to buy those FHA loans wasn’t there. This led to an increase in guidelines for those loans and increased credit scores due to lack of demand. That means borrowers are protected more.”

The Anchorage Daily News in Alaska. “After months of waiting out the dark winter, Anchorage-area Airbnb hosts were ready to welcome thousands of tourists to the Alaska for weddings, vacations and cruises. But the tourist season hasn’t come. Instead, vacation rental owners were hit with a tsunami of cancellations. Over the past three years, real estate broker David Parks has built a mini Airbnb empire. It started with a unit in Bootlegger Cove and has grown to 19 properties. This spring, he’s remodeling seven more along Ship Creek. He, like others, cut his prices in hopes of getting some bookings. ‘It’s been pretty bad,’ he said. ‘The other day we were counting just over 700 cancellations.'”

“Brad Allen, an Anchorage dentist who rents out a cabin in Girdwood, said he’s lost $6,000 in canceled bookings, and estimates another $10,000 in new bookings compared to business in 2019. Allen said he usually makes about $30,000 during the busy summer months, but he isn’t counting on that this year. To lure in some locals seeking a change of scenery during socially distant times, Allen slashed his rate in half. ‘It’s been quite a ride. I pretty much lost every booking between March 15 to the end of May. My life, personally, has been affected tremendously. We’ve cut back on everything.'”

From Bloomberg on California. “Two Million Dollar Price Reduction! Known as the ‘Crown Jewel of La Jolla.'” Privately gated Mid-Century Spanish oceanfront estate is a designated Historical Landmark by Architect, John Lloyd Wright. Breathtaking 180 degree whitewater ocean views from almost every room on 0.64 acres with a pool. Parking over 10 cars and easy walking distance to La Jolla Beach & Tennis Club & the Village. Enjoy watching beautiful bio-luminescent waves nightly. Rare opportunity to own a historic oceanfront property!”

The Houston Chronicle in Texas. “A New Orleans-style home originally designed by famous Houston architect John Staub is on the market after seeing a nearly $2 million price cut, according to a listing on the Houston Association of Realtors.”

From Mansion Global on Florida. “A Fisher Island, Florida, property on the market for $23.9 million is now heading to auction without reserve. This ground-floor condo, which was built in 1992 and is being auctioned by Platinum Luxury Auctions. The property first hit the market in 2018, was taken off, and then returned in December 2019 for the current asking price, according to Trayor Lesnock, founder of Platinum Luxury Auctions. Fisher Island is a private and residential enclave just off Miami Beach. Residents can pay an upfront fee of $250,000 and annually $20,651 to be part of the Fisher Island Club.”

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This Post Has 107 Comments

    1. I’ve recently purchased more shares in mortgage and equity REITs and I am monitoring both the private and public markets closely. I am too stupid to own physical property so I go the REIT route.

  2. ‘Some have ceased making loans they consider riskier, such as those for self-employed borrowers and real estate investors; those that require lower credit scores and down payments; and those for larger amounts, such as jumbo mortgages. Or they may be jacking up fees to make the loans prohibitively expensive’

    They don’t want to make loans right now. Early on in this subprime melt-down I found a quote from an FHA lender saying they just didn’t call people back,

  3. ‘I am trying to be as helpful as I can be and still recover over time. I understand this is a crisis,’ Irish said. But ‘this is my retirement money.’

    It could be worse Steve, you could be stuck with luxury apartments.

    1. ‘this is my retirement money.’

      I think that’s where the eventual battle lines get drawn. The people who thought they had successfully created some security for themselves and are counting on it versus all the people who know they have none and feel that whatever is left after TSHTF should be shared.

      1. Collectivists are n’er-do-wells who want a free ride on the backs of productive members of society. You can understand why the Democrats and their oligarch bankrollers are going all-out to annul the 2nd Amendment, the last remaining bulwark to their plans to take the “redistribution of the wealth” to a level that would do Marx around.

        1. And the first (freedom of speech, assembly, worship). They’ve taken down the rest of our allies (England, Australia, NZ and now Canada) – neither guns nor free thought are permitted much anymore in any of those countries.

          Wonder what happens next?

          1. “Wonder what happens next?”

            Get on the boxcar or grab your rifle.

            The soft version is you must show your proof of vaccination or you can’t travel, can’t renew your license, can’t work, kids can’t attend school.

          2. What happens this fall …..If they manage to topple Pres. Trump you will need it all ..better stock up and get rid of debt…..It should be very interesting indeed ….

          3. The soft version is you must show your proof of vaccination

            What if there never is a vaccine?

      2. “feel that whatever is left after TSHTF should be shared.”

        I assume these are the ones who say that we’re all in this together.

        That said, I don’t want to be too harsh on people who are really struck by this situation, especially the youngsters just getting started in life. It’s easy to mock people living paycheck to paycheck, but we’ve all been there at some point. 25 years ago I had two months rent in the bank and that was it. I would have been up the crick without a paddle. (then again, 25 years ago, how would we have handled this pandemic, with almost no internet? I think we would have had to accept the deaths.)

      3. “I think that’s where the eventual battle lines get drawn.”

        Before C-19 I had been thinking about buying some multifamily but have gotten spooked in the past few years over the lack of control of property taxes and fees now popping up. This doubles as one of the reasons I’ll be working actively to vote out one particular member of Portland City Council.

        Still considering it, but now with C-19 you better have multiple years of savings to cover periods like this. My (selfish) hope is that these risks lower the competition but my concern is that the stronger hands (larger property owners) will just buy properties on the cheap, leaving out the little guys.

    2. But ‘this is my retirement money.’

      Maybe next time try earning it by creating wealth and adding value instead of being an entitled rent seeker.

  4. “Steve Irish, who owns 11 rental properties in four states, is preparing for the worst. While many tenants in North Carolina have been able to keep up, those in Michigan, one of the states hit hardest by the coronavirus, are struggling.”

    To me that is the height of insanity — owning rental properties in multiple states, far from where you live. In the same neighborhood? Maybe, if you are handy and the entry price is right. A two-family? Same deal.

    Where does this guy live? And what does he do when the sink is leaking half way across the country? What does he do when he needs a new tenant? Hire a real estate company to do all of that? There goes any money he could have made.

    1. Larry my guess its family owned property, parents aunts uncles died and the house is under multiple heirs….my father wound up owning 4 hours because my aunt uncle grand parents all passed, and he was the closes to them at least they were all in Norwalk Bridgeport and Fairfield ct.

      1. Plenty of people went on buying sprees looking for passive monthly income via short-term or long-term rentals and equity gains.

        1. Thats fine like a neighbor bought 5 houses same street years ago but he was a plumber handyman and lived walking distance away….that will always make sense.

    2. “…To me that is the height of insanity — owning rental properties in multiple states, far from where you live…”

      A friend of mine, who started carefully buying rental units over 30 years ago and managing them very sucessfully , told me there are only a few simple rules to remember as a landlord:

      1) Screen potential tenants rigorously, including calling previous landlords, tight credit check, etc.

      2) Make sure that you can drive by your properties on a daily basis. If you can’t drive by at a moments notice, don’t buy as a rental, period.

      1. 3) Don’t hire a property manager. It adds an extra layer of cost, and most of them suck.

    3. I am too stupid to own physical property instead I own a portfolio of RMBS, CMBS mortgage REITs, equity REITs and now some international REITs which look very attractive with low P/E ratios.

      These REIT shares have better returns than physical ownership and far more diversification across many property categories and MBS. It’s not worth it to own physical real estate, the hassle is too much, let a REIT corporation own and run the property and own a share of the dividends.

  5. ‘Over the past three years, real estate broker David Parks has built a mini Airbnb empire. It started with a unit in Bootlegger Cove and has grown to 19 properties. This spring, he’s remodeling seven more along Ship Creek’

    This is the heart of Anchorage, so pricey. How did he get so many investment loans?

    1. This would be great news for me as to accept the position here, they said I had to work in the office. At my previous company (Cisco), I could WFH or go to the remote office. Of course, I get paid much more so it was worth moving. However, what will happen to the housing market if people didn’t need live here? Who would stay? Maybe Director, VP, and up as they can afford it. Maybe roles that require ass kissing much. Otherwise, see ya!

    2. The only names I saw mentioned in the article were Mondelez, Nationwide, Barclays, WeWork and Morgan Stanley. They’re big, but they aren’t Big Tech.

      1. Does anyone else see the screaming irony of WeWork employees working from home? 🙄

        1. + a billion oxide. The hilarity… It hurts!

          I’ve been a developer for my entire career and I really could work from a 45′ catamaran as long as the marina has good wifi. I need to work on the wife’s tendency to experience motion sickness.

          My immediate group alone has a dev group in Tampa, Chiraq (aka Chicago) and Bangalore. Many that we work with are in Jersey City and the U.K. Zoom is actually better than the cisco video phones we have in the office and I don’t miss that commute.

  8. “‘You’re not going to have as many overpriced listings out there,’ Saab said “We’ve had a lot in the past and I think it’s come to a realistic price point. So, if you’re a buyer, that’s great. Take advantage of it.’”

    Now he tells us!

    1. He wont be so lucky with the other 7 houses.

      I really don’t care if sells his mansions at a loss.

      I will admit that the crazy things he says and does are amusing. It is interesting that someone who could start SpaceX from scratch and heavily undercut Airanespace, United Launch Alliance and everyone else, and who will probably be the first to send people back to the moon and later Mars is such a screwball at the personal level.

    2. Musk “…He wont be so lucky with the other 7 houses….”

      Every time I see one of these stories about some billionaire’s properties my first thoughts are about holding costs.

      These large estates require a staff just to mow the lawn, fix everything, paint and keep the place clean. Then you have to hire someone just to manage all these people.

      Having said that, Musk’s lifestyle must be inconceivable to most, [at least it is to me], but it must be fun to have your butler fix you a martini, then roll around on the lawn in your backyard.

      Wouldn’t mind being one of his 5 sons, but they drive the hottest cars [Tesla’s ?] and have no trouble getting the babes.

      Oh well, back to work…..

  11. The sad thing here is that a dentist (a well paying professional) felt he has to invest in a scheme

    really – assuming his family is healthy, he can afford food and shelter etc. Did you not even have 6 months of an emergency fund

    “My life, personally, has been affected tremendously. We’ve cut back on everything.’”
    —–
    “Brad Allen, an Anchorage dentist who rents out a cabin in Girdwood, said he’s lost $6,000 in canceled bookings, and estimates another $10,000 in new bookings compared to business in 2019. Allen said he usually makes about $30,000 during the busy summer months, but he isn’t counting on that this year. To lure in some locals seeking a change of scenery during socially distant times, Allen slashed his rate in half. ‘It’s been quite a ride. I pretty much lost every booking between March 15 to the end of May. My life, personally, has been affected tremendously. We’ve cut back on everything.’”

    1. Real estate is not a risk free investment. Maybe a CD that has insurance on it might be safe, but who knows if the Government will claim the right to a wealth tax on savings assets.

      You use to be able to calculate risk a lot easier 50 years ago. Government overreach is a risk factor now like never before.

    4. I’m a single, childless year old guy who rents a room and too stupid to buy physical real estate. Instead over the last 10 years I’ve saved all my money and built a huge portfolio of REITs. I own NO physical real estate, I own shares where I am paid dividends.

      With the recent corrections in REITs, I have purchased more. How stupid can anyone be to buy physical real estate? You get no diversification and the long-term risk-adjust returns are trash. Plus real estate becomes highly illiquid in down markets.

      1. Ryan, serious question for you : Do you not think this is just the beginning of a downward real estate trend for a good number of markets due to the fact that this is now a credit event? I realize it is impossible to time markets but what are your thoughts on the next 6 to 18 months for US RE?

  12. I just saw this. Zillow is predicting just a modest 2-3% drop in prices this year. Saying there is still low inventory. https://apple.news/AVj3yQeCjRiOqwiI05R_4aw

    Maybe I’m looking at things wrong. But my ‘recency bias’ goes back to 2005, so I anticipate large swings here in CA. But the average realtor’s recency bias seems to only go back a few months. 🤷🏻‍♀️

    1. But the average realtor’s recency bias seems to only go back a few months.

      The average realtor has no idea what you’re talking about but is ready to help if you’re serious about buying or selling now.

  13. ‘Danny Catalanotto’ ‘It could be $8,000 to $10,000 by then. How do you come up with that if you’ve been out of work?’ he said.”

    Danny, here is a tip for next time. Try living below you means and saving/investing. It works just like magic.

    1. When work as a church organist dried up in mid-March

      Say what? I’ve never heard of a professional church organist. Isn’t that a volunteer gig that you do on Sunday morning? And he was paying a $2000+ mortgage. How much was he getting paid?

      1. It depends on the church.

        For example, two of my immediate family members are LDS church organists who volunteer their services. One of my wife’s fellow church organists with more professional organ training and skill refuses music callings at his own LDS church congregation in favor of a paid organist position at a Protestant congregation.

        1. I could see someone getting a stipend for playing at a large church (ours doesn’t pay), but a full time paycheck that could cover a $2000+ mortgage?

          We once had a dude who was the parish music director, meaning he also taught in the parish school (music and other subjects). His job was full time, but he wasn’t well paid by any stretch of the imagination.

          I suppose that a Protestant Megachurch might pay well, but per the article he played at a Catholic parish. Something doesn’t add up.

          1. Anyone unfamiliar with this piece should check it out, particularly the footwork starting at 6:09. AMAZING!

          4. J.S. Bach was a church musician. Managed to sire 18 or so kids (pre-birth control era) and write an unfathomable amount of music that defined the future direction of the Western classical tradition.

            Not bad on a church musician’s salary!

          5. J.S. Bach was a church musician

            A quick read of his bio indicates that he did more than play the organ on Sunday. He seemed to have a lot of jobs with the word “meister” in the title.

          7. My wife and I were in Munich in July ‘02. We wondered into the Frauenkirche and were treated to a full performance, as a rehearsal for a concert. The most moving musical experience of my life!

          8. I do enjoy Bach violin concertos more than just about any other type of music, composer, artist. I visited St Michaels in Hamburg Germany and saw his grave marker.

          9. this piece

            Is not just about the music. It’s about the skill of the organist using both arms and both legs to execute the piece. Appreciate the coordination required to do that.

          10. “I visited St Michaels in Hamburg Germany and saw his grave marker”

            Thanks for mentioning that. I’m into that kind of thing; maybe we’ll make it to Hamburg on our next trip to Germany. We have visited the composer’s graveyard in Vienna, where Brahms and Beethoven are memorialized, and also the Prague castle, where Smetana and Dvorak were laid to rest.

    2. ” How do you come up with that if you’ve been out of work?’”

      The time to think about that has long since passed Dan.

      Paying 4x long term trend price for a rapidly depreciating asset like a house is never a good idea. Doubling down by financing it with a subprime mortgage when rental rates are half that monthly cost is even worse.

  14. Centreville, VA Housing Prices Crater 35% YOY As One Fairfax County Housing Demand Tanks As Rental Rates Plunge

    https://www.movoto.com/centreville-va/market-trends/

    *Select price from dropdown menu on first chart

    As a distinguished economist questioned, “Why buy a house when you can rent one for half the monthly cost… Buy it later after prices crater for 70% less.”

  15. DOJ joining the fray.

    https://justthenews.com/politics-policy/coronavirus/doj-intervenes-behalf-church-battle-virginia-governors-virus

    “The Justice Department on Sunday intervened on behalf of a church fighting Virginia Gov. Ralph Northman’s virus restrictions in a federal court case that may determine whether religion is an essential service.”

    “DOJ’s filing argues the church can’t be treated differently than other businesses and that faith is essential during a pandemic.”

    “’For many people of faith, exercising religion is essential, especially during a crisis,’ Assistant Attorney General Eric Dreiband said. ‘The Commonwealth of Virginia has offered no good reason for refusing to trust congregants who promise to use care in worship in the same way it trusts accountants, lawyers, and other workers to do the same.’”

    1. Coronavirus don’t care about religious affiliation. Coronavirus cares about social distancing which interferes with transmission.

      Some churches get this, others not so much. It probably depends in part on how they collect funds from their membership. LDS members tend to pay by check, not cash.

      2. Listen Professor, you are going to lose that tenure if you keep shilling for the Plandemic. Here are the numbers from CDC and they scream we’ve been scammed. Look at the trends and the Covid-1984 only deaths column https://www.cdc.gov/nchs/data/health_policy/Provisional-Death-Counts-COVID-19-Pneumonia-and-Influenza.pdf

        It is a nasty respiratory infection but from a numbers perspective it’s statistical noise with a tiny mortality rate. It hits people with less then optimal immune systems or that are already in the mortality zone of the actuarial tables. Given the poor health of many Americans it is surprising that more were not impacted. It takes a heavy toll on 3rd world medical systems as well (I’m looking at you NYC and Nothern Italy).

        1. I have two words for you:

          Rates matter.

          And further, I shill for nobody. That’s why I post here: It’s a shill-free site.

          1. Rates matter

            They may, if they are ratios of things relevant to the audience. Most of us recognize that we are in the 99.99%

          2. Yes exactly which is why I’m confused as you should be agreeing with me. The change rate depicts decline of new cases in the last sample row.

      3. Sweden = no social distancing.
        Norway = social distancing.
        No difference in outcome.
        Stop watching television and Jesuit-trained vaccine salesmen.

    2. ‘The Commonwealth of Virginia has offered no good reason for refusing to trust congregants who promise to use care in worship in the same way it trusts accountants, lawyers, and other workers to do the same.’”

      Comrade Northam and his fellow Bolsheviks hate and fear devoutly religious people who exemplify the values and virtues, especially a sense of morality, that the collectivists are going all out to eradicate.

    3. Does anyone mention the strong and specific constitutional limits to the government’s powers over churches?

      1. I’m not religious but it was odd that these pastors did not stand up against the state via the 1st Amendment (freedom to assemble, freedom of speech). There is irony here in that the commie crowd re: abortions will say “My body, my rights” but in this case they are saying “I should be able to control your body.” or at they support the state controlling others under the auspices of safety. If not safety than a contrived concept of ‘with freedom comes responsibility’ which is collectivist doublespeak for you have no freedom and should be thankful of your chains take this vaccine if you want to go back to work or send your kids to school.

  16. When work as a church organist dried up in mid-March, Catalanotto says, he expected his mortgage company to offer help.

    Did you hear about the streaker in church? They caught him by the organ.

    Ahem….

  17. “Steve Irish, who owns 11 rental properties in four states, is preparing for the worst.

    Imagine how much different life would be if landlords could own a max of three properties, and had to pay cash for anything over one.

    1. Let a person buy what they want.

      Don’t let the government subsidize them.

      The scheme of borrowing to rent out and flip might just have taken a mortal wound.

      Did jingle get out alive?

  18. “‘I am trying to be as helpful as I can be and still recover over time. I understand this is a crisis,’ Irish said. But ‘this is my retirement money.’”

    Heckova retirement plan, Steve-o.

  19. Fisher Island is a private and residential enclave just off Miami Beach. Residents can pay an upfront fee of $250,000 and annually $20,651 to be part of the Fisher Island Club.”

    I can only imagine the gruesome stiffs in that club.

    1. Interesting, given how high end real estate is getting clobbered, one might think that the market for exotic, ultra expensive supercars might also be affected.

    3. Ferrari builds cars. Ford and GM are poorly run finance companies/pension plans that operate assembly lines on the side.

  22. Share of Mortgage Loans in Forbearance Increases to 7.54%
    The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance increased from 6.99% of servicers’ portfolio volume in the prior week to 7.54% as of April 26, 2020. According to MBA’s estimate, a total of 3.80 million homeowners are now in forbearance plans.
    …
    “The share of loans in forbearance increased once again in the last full week of April, but the pace of new requests slowed,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “With millions more Americans filing for unemployment over the week, the level of job market distress continues to worsen. That is why we expect that the share of loans in forbearance will continue to grow, particularly as new mortgage payments come due in May.”

    Added Fratantoni, “As states across the country begin to re-open their economies, a silver lining we are seeing is indications of increased activity in the housing market, including more purchase applications in some markets. We are hopeful that the housing market can eventually contribute to a broader rebound in economic activity, which would then begin to reverse the unprecedented job losses experienced during this crisis.” https://www.mba.org/2020-press-releases/may/share-of-mortgage-loans-in-forbearance-increases-to-754

    1. Share of Mortgage Loans in Forbearance Increases to 7.54%

      I was expecting that percentage to be much higher, as almost 30+% can’t pay the rent.

      1. According to Experian:

        “As part of the recently enacted Coronavirus Aid, Relief and Economic Security (CARES) Act, mortgage accounts in forbearance as a result of COVID-19 cannot be reported negatively to the credit bureaus by lenders.”

        But be careful debt donkeys. You have to apply for forbearance and probably prove you need it due to the virus pandemic. If you don’t check all the boxes with your lender, it’s a “credit event”. If you’re already late when you apply, forget about it.

        In NY, there can be no balloon payments. Forbearance amounts go to the end of the loan.

          1. The mortgage is designed to bring you to the end of the line just at the end of the loan. Just smile and be happy!

        2. What happens if a mortgage HODLer goes underwater on his alligator during quarantine and can never hope to get back above water in the aftermath of quarantine?

          – Will lots of underwater HODLers opt to walk away?

          – Will HODLers hold out hope for the Fed to reflate prices to above what they owe, even after having missed a bunch of payments?

          – What happens if a HODLer reaches the point where they have to move out when they are still deeply underwater?

          There’s so many interesting future scenarios to ponder!

  23. U.S. mortgage lending standards have tightened up and 3.5% downpayment mortgages are out, right?

    1. Ally home loans pre-approves borrowers online in 3 minutes and gives existing Ally members $500 toward closing costs
      Laura Grace Tarpley
      3 hours ago
      Ally high yield savings account 4×3
      Alyssa Powell/Business Insider
      Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective.
      – Ally Home is a mortgage lender worth considering for people who need a jumbo loan, don’t have much money for a down payment, or who like an online application process.
      – Ally’s helpful payment and affordability calculators make it a strong option for people who want a digital experience. You can get pre-approved for a loan within three minutes.
      – If you are already an Ally customer and get a mortgage through Ally, the company will contribute $500 toward closing costs.
      – Ally operates in 40 states, and it doesn’t process home equity loans, home equity lines of credit, or government-backed loans.

      Ally Home, the home loan division of Ally Financial, allows you to go through the mortgage application process completely online. Take advantage of Ally’s easy-to-use web interface to calculate your mortgage payments, get pre-approved for a loan in three minutes, and sign and submit documents.

      Although the Ally mortgage application process is digital, you can contact a human customer service representative with questions. You will also meet someone face-to-face to sign your closing documents.

      You can apply for a first mortgage or refinanced mortgage through Ally Home, but the company doesn’t offer second mortgage options such as home equity loans or home equity lines of credit (HELOCs).

      Ally is a strong option for people who have good credit scores but minimal money for a down payment. You may be able to put as little as 3% down, and if you need a jumbo loan (a mortgage for a large amount of money), Ally allows you to qualify with as little as 10% down.
      …

  25. I see the markets closed up at the end of the day despite more non-performing CRE being exposed and continuing job losses. Could it be the shelter-in-place orders being lifted?

        1. The tricky detail is understanding if Unlimited Quarantinive Easing has an infinite time horizon, or if there is some kind of accidental or deliberate future expiration date in store. It makes life tricky for risk asset HODLers!

  26. I found what may be (3) early stage distressed rental listings in Laguna Niguel CA 92677…could be tip of the spear showing?

    Issues with mortgage:

    https://orangecounty.craigslist.org/apa/d/laguna-niguel-check-out-this/7116016678.html

    And another with issues / relatively low price:

    https://orangecounty.craigslist.org/apa/d/laguna-niguel-adorable-updated-home-in/7117648062.html

    This one seems relatively inexpensive…may be problematic as well:

    https://orangecounty.craigslist.org/apa/d/laguna-niguel-this-beautiful-single/7095128108.html

    I am not sure if these are just distressed…or are illegit…or are SPAM.

    1. A good way to find out if its a (too affordable to be true) scam is to ask the address then do a search, you will often see that someone has copied pictures and a description from a home recently listed for sale or rent for a much higher price on Zillow ect. People are pretty desperate and fall for it, I make a habit of searching these and flagging them for removal so no one gets scammed.

    2. we are touring a rental in Dana Point Wednesday that is also too cheap for the area. We tried to drive by today but the guard wouldn’t let us in the gate. The realtor said we are 1 of 3 applicants. We sure would like to live there in paradise a year while prices continue to crater, and its just down the street from our boat.

    1. Is this in keeping with or contrary to the “Morrissey school of optimism”?

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