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What are the negatives of letting people postpone 2 months worth of mortgage payments?
Posted on 3/21/20 at 6:57 am
Posted on 3/21/20 at 6:57 am
what would happen to the banks if they just let people freeze their mortgages for 2 months?
no penalty, no interest..
just a pause in time
no penalty, no interest..
just a pause in time
This post was edited on 3/21/20 at 7:10 am
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Posted on 3/21/20 at 6:59 am to ApexTiger
I have no idea but I support it.
Large corporations are much better able to tolerate lower profits than small businesses.
We should pass emergency legislation to help out small business expenses ASAP. That is what will keep unemployment numbers down.
Large corporations are much better able to tolerate lower profits than small businesses.
We should pass emergency legislation to help out small business expenses ASAP. That is what will keep unemployment numbers down.
Posted on 3/21/20 at 7:02 am to ApexTiger
The one thing that needs to be communicated is that it doesn’t mean you get two months free, rather two months suspended.
When I hear people talk about it happening in Italy etc. It seems like they think it will be paid for them.
When I hear people talk about it happening in Italy etc. It seems like they think it will be paid for them.
Posted on 3/21/20 at 7:20 am to ApexTiger
There are so many things interconnected with mortgages, that may cause more harm than good. I’d rather the IRS waive any penalties if someone wants to take a hardship distribution from their IRA or 401k to pay for their mortgage or rent.
Posted on 3/21/20 at 7:22 am to ApexTiger
Hmmm...not sure. It seems the only real loss would be 2 months interest on the front end but recouped on the back end.
Some of the nurses were wanting this just last night.
Some of the nurses were wanting this just last night.
Posted on 3/21/20 at 7:24 am to ApexTiger
I’ve suggested this in other threads, but what they should do is suspend payments for two months but offer to those who wish to continue to pay that 100% of their payment go towards the principal.
This incentivices those who can continue to pay to do so.
This incentivices those who can continue to pay to do so.
Posted on 3/21/20 at 7:25 am to ApexTiger
What about the MBS tied to these loans?
Posted on 3/21/20 at 7:25 am to gatorsimz
With everything else that’s been interconnect and messed up with the entire situation letting people push 2 months of mortgage payments to the back end of their mortgage wouldn’t be that bad.
Only issue with that is is that it won’t help out everyone. Not everyone owns their own home.
Only issue with that is is that it won’t help out everyone. Not everyone owns their own home.
Posted on 3/21/20 at 7:26 am to ApexTiger
You really just add the interest on the back end.
It would free up more cash for investing for me.
It would free up more cash for investing for me.
Posted on 3/21/20 at 7:26 am to ApexTiger
I would rather not extend my mortgage another two months. I want it paid off asap.
Posted on 3/21/20 at 7:31 am to ApexTiger
The banks have bills to pay as well. They rely on the interest from those payments to pay their employees, loans, lenders, etc.
Posted on 3/21/20 at 7:33 am to ApexTiger
Mortgages may be ok for a minute, but there may be some unintended consequences. Banks borrow against them, banks sell them, companies invest into mortgage-backed securities (see 2008 as to what happens with that when people don’t pay).
Some say rent should be postponed as well, but people forget that some landlords use rent as their sole income.
So it would help no one to suspend either one, just kicking the can down the road and creating more issues.
Some say rent should be postponed as well, but people forget that some landlords use rent as their sole income.
So it would help no one to suspend either one, just kicking the can down the road and creating more issues.
Posted on 3/21/20 at 7:34 am to NPComb
something stopping you from paying it if/when suspended?
i dont have a mortgage. whats it like?
i dont have a mortgage. whats it like?
Posted on 3/21/20 at 7:36 am to ApexTiger
I think it will be 6 months minimum and up to a year for certain individuals based on factors similar to the cash handout. I’m 100% in favor of this, even on new mortgages. Banks have made hand over fist in refi’s and mortgage loans over last decade, as well as the cash on hand from patrons which can be invested. They are and will be fine during this pause.
Rent is off the table unless the government wants to subsidize every landlord in America.
Rent is off the table unless the government wants to subsidize every landlord in America.
This post was edited on 3/21/20 at 7:41 am
Posted on 3/21/20 at 7:36 am to ApexTiger
quote:It's a good idea. Theoretic negative would be lender insolvency. But a creditor in those straits would be facing the same issue down the road d/t losses in foreclosure.
What are the negatives of letting people postpone 2 months worth of mortgage payments?
With the current libor rate vs home loan differential, a no closing cost two month deferred payment ARM offer could be a great marketing play to draw business.
Posted on 3/21/20 at 7:40 am to GatorReb
quote:But in theory, if the owner has a note, he could pass on a rental cut for two months and still be ahead.
Not everyone owns their own home.
Posted on 3/21/20 at 7:55 am to NPComb
quote:
I would rather not extend my mortgage another two months. I want it paid off asap.
making regular payments will wind up taking more than 2 months off the loan; how many months depends on where you are in the loan cycle
if you are early in a 30 yr loan; the amount knocked off will be dramatic, with ALL the interest going towards principal
IF you have the means; NOW is a great time to get ahead
Posted on 3/21/20 at 7:56 am to ForeverGator
quote:this is a tricky question & a serious concern
Some say rent should be postponed as well, but people forget that some landlords use rent as their sole income.
Posted on 3/21/20 at 8:00 am to NPComb
quote:
I would rather not extend my mortgage another two months. I want it paid off asap.
I’m sure they will gladly take your payment
Posted on 3/21/20 at 8:08 am to idlewatcher
What would be smart is for people to use their stimulus checks to help pay their rent and mortgages.
But people will go buy a new iPhone instead and whine to their friends that they have no money and make be evicted.
But people will go buy a new iPhone instead and whine to their friends that they have no money and make be evicted.
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