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Started By
Message
re: Mortgage Delinquencies are Spiking
Posted on 7/16/20 at 10:58 am to Lickitty Split
Posted on 7/16/20 at 10:58 am to Lickitty Split
You're talking about the servicers. The GSEs and the federal housing agencies have ways to incentivize lenders to service loans in forebearance
Federal Agencies Encourage Mortgage Servicers to Work With Delinquent Borrowers
There's a link at the bottom that explains. Pretty much there were huge regulatory burdens that got axed so that servicers could handle the capacity. My guess is for private notes servicers just jacked rates so that the volume would slow.
Federal Agencies Encourage Mortgage Servicers to Work With Delinquent Borrowers
There's a link at the bottom that explains. Pretty much there were huge regulatory burdens that got axed so that servicers could handle the capacity. My guess is for private notes servicers just jacked rates so that the volume would slow.
This post was edited on 7/16/20 at 10:59 am
0
Posted on 7/16/20 at 10:59 am to LSUFanHouston
quote:
Are the banks going to want all that inventory, or are they going to give people additional chances to work with them?
The banks won't care as long as it is insured and they can convey the house to HUD, FHA, etc.
The ones that carry a large REO/conventional portfolio like Nationstar AKA Mr Cooper are the ones this will hurt.
Posted on 7/16/20 at 11:03 am to stout
quote:
The banks won't care as long as it is insured and they can convey the house to HUD, FHA, etc.
Posted on 7/16/20 at 11:03 am to LSUFanHouston
quote:
But processing a foreclosure takes time and additional costs.
The additional cost are all reimbursed if the house is conveyed. Only the houses that can't be conveyed for various reasons will the lender incur the additional costs as it will move to their REO portfolio.
That's why hardly any banks underwrite their own paper anymore. I think Ocwen and Mr Cooper are the largest two that still do so.
This post was edited on 7/16/20 at 11:05 am
Posted on 7/16/20 at 11:25 am to stout
quote:
Only the houses that can't be conveyed for various reasons will the lender incur the additional costs as it will move to their REO portfolio.
My experience is that process still takes a long time. Those borrowers still have to go through the entire foreclosure process unless I'm missing something.
quote:
I think Ocwen and Mr Cooper are the largest two that still do so.
This sounds correct. Caliber sold their REO book to Hudson Advisers because they like the rental income opportunity. I have no idea about Wells.
Posted on 7/16/20 at 11:38 am to wutangfinancial
quote:
My experience is that process still takes a long time.
Yes getting to the point of going to sheriff sale can take a while but it varies based on a lot of factors. State laws, legal matters with the individual like bankruptcy, the loan type, etc.
There are exceptions like a Deed in lieu or cash for keys that can speed up the process.
Once it goes to auction, and the bank buys it back, they typically like to try and convey the property as quickly as possible. They try to put a 30-day timeframe on that process.
What happens is during presale (pre-auction) they only do maintenance repairs to keep the house from getting worse. Fix leaky roofs, cut grass, remove mold and perishables, winterize, etc. During that process, they already have bids from the contractor of what items need to be repaired to convey the property as HUD has a checklist that has to be met. As soon as the property goes post-sale it's a mad rush to fix the remaining conveyance issues and meet the 30 day timeframe.
This post was edited on 7/16/20 at 12:12 pm
Posted on 7/16/20 at 11:59 am to stout
quote:
cash for keys
Squatter laws in the Northeast are insane. Once you go cash-for-keys the residents can't be removed legally in a lot of states
quote:
What happens is during presale (pre-auction) they only do maintenance repairs to keep the house from getting worse. Fix leaky roofs, cut grass, remove mold and perishables, winterize, etc. During that process, they already have bids from the contractor of what items need to be repaired to convey the property as HUD has a checklist that has to be met. As soon as the property goes post-sale it's a mad rush to fix the remaining conveyance issues and meet the 30 day timeframe.
You clearly have been using foreclosed properties for investment purposes. Is that what you do now?
Posted on 7/16/20 at 12:02 pm to cadillacattack
I hate it for the folks that are in a bad position, but in the next few months I'll start looking for foreclosures to invest in.
Posted on 7/16/20 at 12:04 pm to LSUFanHouston
quote:
Does this count people who wait until the 15th day to pay mortgage, since there is a 15 day late grace period for late fees?
No. Late payments aren't reported to the credit bureaus until they are 31 days past due.
Posted on 7/16/20 at 12:10 pm to wutangfinancial
quote:
You clearly have been using foreclosed properties for investment purposes. Is that what you do now?
I have been flipping houses since '02 but I also own a regional servicing company. I currently offer vacant property registration, property preservation, and inspection services in 16 states to various clients.
Posted on 7/16/20 at 12:10 pm to wutangfinancial
It's not just blue states.
Al Abama has a one-year right of redemption.
Al Abama has a one-year right of redemption.
Posted on 7/16/20 at 12:15 pm to stout
Got it. Property Pres lol I was trying to remember what we called the cost center I supported that did the maintenance. You could tell you know servicing you talk the language.
Posted on 7/16/20 at 12:17 pm to AUHighPlainsDrifter
quote:
I hate it for the folks that are in a bad position, but in the next few months I'll start looking for foreclosures to invest in.
Why feel bad? Those people need to be able to afford where they live? It's a long term good for that borrower.
Posted on 7/16/20 at 12:22 pm to Lickitty Split
quote:
don’t think mortgage lenders are worried about inventory. They are worried about money in their banks. People not paying mortgages means less money in their banks. If they aren’t getting payments and the owner doesn’t have a job, 100% they are gone. It might be different for a newly employed person or someone who has a job but medical or other debt is weighing them down.
You are half right about "money in the banks".
This is the primary concern for lenders right now. But the bulk of the risk comes in the resale value of the mortgage. If the market to purchase mortgage backed securities falters, the value of a new loan could be negative to the originator. In a similar fashion, if a newly originated loan has a late payment, the value of that loan tanks and it negatively affects a guarantee from the originating company.
The originating companies only "earn" money by reselling the loans. Without capital (lost by the resale value or by delinquent new loans), the originating companies will go out of business due to lack of funds available on new loans (again, they only "make" money by writing and selling new loans. It doesnt take a lot to flip their asset table to where they cant fund any new business this going out of business).
Posted on 7/16/20 at 12:29 pm to stout
quote:I'm so old I can remember when you only owned a convenience store/gas station in Louisiana.
I have been flipping houses since '02 but I also own a regional servicing company. I currently offer vacant property registration, property preservation, and inspection services in 16 states to various clients.
They grow up so fast...
Posted on 7/16/20 at 12:29 pm to wutangfinancial
quote:
Why feel bad?
Because unlike '07 and '08 this time isn't self-inflicted by the borrowers.
Posted on 7/16/20 at 12:33 pm to stout
Ya that's actually a good point
Posted on 7/16/20 at 12:33 pm to LSURussian
quote:
I'm so old I can remember when you only owned a convenience store/gas station in Louisiana.
That was way after I was building and flipping houses. I dropped out of college in '01 to get into real estate.
The gas station was bought as a flip too. Bought it in 2007 and sold it in 2010 after building the business back up. The guy I bought it from was in foreclosure at the bank and I snagged it in a short sale. He had ruined the business and had zero inventory.
ETA: I hated that gas station. It's a good business for some but the people you have to employ are usually horrible and I can't stand making money a nickel at a time.
This post was edited on 7/16/20 at 12:37 pm
Posted on 7/16/20 at 12:37 pm to Mr Perfect
quote:
trump and jpow need to react quickly with fiscal to inject $$$ before it gets too late
Hell no
Posted on 7/16/20 at 1:31 pm to stout
Who is our gas station mogul? Was that Fella?
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