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Question about freezing mortgages/evictions
Posted on 3/23/20 at 9:50 am
Posted on 3/23/20 at 9:50 am
A lot of states/cities are putting evictions for nonpayment of rent/mortgages on hold, and utilities companies are suspending disconnections, late fees, etc. Makes sense to me, as it's going to be a hard time for a lot of people and no one should be without electricity or heat/cooling. However, when things go 'back to normal', how will anyone catch up? If you can't afford your payments, you're probably living check-to-check or not much above it, and if you're facing six months of payments all at once when this all blows over you're going to be stuck.
Might be a dumb question but is always my first thought when I see a new article about this.
Might be a dumb question but is always my first thought when I see a new article about this.
5
Posted on 3/23/20 at 9:53 am to zacata88
quote:
how will anyone catch up?
they won't. not people living paycheck to paycheck.
Posted on 3/23/20 at 10:04 am to zacata88
quote:
However, when things go 'back to normal', how will anyone catch up? If you can't afford your payments, you're probably living check-to-check or not much above it
Don't worry, Biden will save us
Posted on 3/23/20 at 10:07 am to zacata88
Well technically that's what the stimulus money is to be used for.
However, since many of the places that employed those individuals will be bankrupt and those people won't have jobs, well who gets the money?
However, since many of the places that employed those individuals will be bankrupt and those people won't have jobs, well who gets the money?
Posted on 3/23/20 at 10:11 am to TigerFred
I have made posts about the mortgage modification programs being touted. FYI, they are sold as doing you a favor but in reality, they are just a way for banks to nail you for more fees and interest.
Some of what I posted earlier:
Any "modification" is usually just delaying the inevitable sadly. The banks know this but this is a way for them to "flatten their curve" so they do not get hit with a ton of foreclosures at once.
Some of what I posted earlier:
quote:
Here is one that extended the mortgage for 12 months. This was how it functioned prior to this so not sure if it will change now.
quote:
It results in an interest-free second mortgage that accounts for up to 12 missed payments and immediately brings the loan current
This loss mitigation method, which is only available for FHA loans, creates an interest-free second mortgage that contains up to 12 months of accrued mortgage payments.
It brings your account up to date immediately, and must be paid off in full when the first mortgage is paid off or if the property is sold.
I had a friend take one out and they structured it as a second mortgage for $40K and they told him that his monthly payment was $250 for 5 years. What he didn't realize was that it was only 5 years of paying the penalties, fees, and interest. Of course his fault for thinking that was going to take care of it but at the end of 5 years, he was then stuck paying around $800 per month to pay off the principal. This was on top of his original mortgage. He had to refi his house to combine the payments or else he would have never made it. It cost him a ton of money to learn a lesson.
quote:quote:
I’ve heard that at least one bank will let it slide for a year.
That's not how it works. You have to pay it eventually. Usually its added as a lump sum balloon payment that catches people off guard. You also incur a lot of penalties and interest on it.
Any "modification" is usually just delaying the inevitable sadly. The banks know this but this is a way for them to "flatten their curve" so they do not get hit with a ton of foreclosures at once.
Posted on 3/23/20 at 10:13 am to zacata88
They just need to forbearance the 12mnths payments and add it as a silent second
When they refi or sell they pay it back
They did this with tons of ppl in 2008
When they refi or sell they pay it back
They did this with tons of ppl in 2008
Posted on 3/23/20 at 10:17 am to SDVTiger
quote:
They just need to forbearance the 12mnths payments and add it as a silent second
When they refi or sell they pay it back
They did this with tons of ppl in 2008
Not everyone will qualify for the silent second and also that silent second is still eating up interest sometimes at a higher rate than the original then it comes due as a balloon payment. We, the mortgage field service industry, had an uptick in evictions and cash for keys as those balloons from 2008 started coming due and people couldn't afford it so they walked away instead.
Posted on 3/23/20 at 10:30 am to zacata88
When I lived in a condo by the beach (overly expensive because of it's location) when I was building a home. Right when I was literally balls to the wall boxes stacked up moving...
I saw a neighbor who we casually knew from her work. She lost her job. On the day before we moved she came over asking for help as her and her son were going on the streets. I was shocked. They had zero shits to give about her and her son. They put a pad lock on her apt. door with all of her things inside. She wanted to go to court and fight as I suppose they never expect anyone to do this. We offered help but I regret not offering her to live with us.
I get the apt. condo business wanting the perfect free flow of income but I also got her troubles were caused in a flash from a job loss of a few weeks.
Life sucks, and then you die.
I saw a neighbor who we casually knew from her work. She lost her job. On the day before we moved she came over asking for help as her and her son were going on the streets. I was shocked. They had zero shits to give about her and her son. They put a pad lock on her apt. door with all of her things inside. She wanted to go to court and fight as I suppose they never expect anyone to do this. We offered help but I regret not offering her to live with us.
I get the apt. condo business wanting the perfect free flow of income but I also got her troubles were caused in a flash from a job loss of a few weeks.
Life sucks, and then you die.
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