Americans Are Losing Their Homes

If they are still down 30% from the pre-COVID economy (Trumps bestest economy evah) then what is the issue?

With all the moratoriums it’s surprising they didn’t spike higher once those moratoriums expired. It’s actually a sign of economic strength that foreclosures are still below 2019. I assume pretty much nowhere still has covid restrictions on the foreclosure process in 2023.

 

You’d think high prices and high interest rates and corporate purchasing of homes would drive more foreclosures but…. The lending restrictions got pretty stringent over this decade so maybe not.

 

Headline sounds like there’s a crisis. Story says it’s simply routine, that as long as there are mortgages, there will be foreclosures

 

I’m confused. Per some here, the economy is going great and people are just not smart or nuanced enough to understand it. Surely This will be dismissed as anecdotal and not data driven.

 

My mortgage payment doubled last year due to taxes and insurance. If I was on a fixed budget I'd be screwed.

 

curious what do you consider a stringent lending restriction? Couple examples ?

 

agree. I Handle all finances for my 80+mom. She lives in Charlotte and her property taxes tripled. Yes tripled. Fortunately we can afford to help but absent that in her fixed income she’d be screwed. When I called the county they told me th market value is higher because it’s 5 acres and could be developed. Problem is where she lives has put a moratorium on developing into more SFR so the new value is based on something she can’t even do. Total BS.

 

From the article (who reads those):

Basically, they are saying foreclosures are up and using a time period in which many areas had additional regulations making it much harder to foreclose on homes as the baseline. If you use a more standard baseline, foreclosures are down.

 

I live in charlotte and that is definitely an outlier.

 

that’s fair and I’ll admit I click baited and only read headline about Americans losing homes.

 

I will not ever buy a mortgage unless it’s a fixed rate. Also living in Florida at your “homestead” keeps your yearly increases at no more than 3%. As to homeowners insurance that’s a crap shoot. Mine currently is less than 2K a year.

 

She’s in Mathews. I was furious when I got the county on the phone and was told about the value based on development. I told her I wanted to apply right away and develop the property myself( been in the business for 20) and she had to admit that we couldn’t Actually develop it. Her answer. You can appeal next year. Meanwhile she’s out the $. Total BS. Thankfully we can afford it but had she been on her own that would be crushing.

 

I thought you could only tax the residential lived in house on the property, not the land? Maybe that was once upon a time...

 

Home prices are way up, so another factor is if someone has owned for awhile they should have a substantial equity buffer. If they get in trouble they should be able to just sell and find a buyer relatively quickly, a bank could theoretically even buy the owner out. No reason for foreclosure unless there’s shenanigans to try and drag it out.

 

I pretty sure that he was referring to the escrow payments for taxes and insurance not the principle and interest (the actual mortgage part of the monthly mortgage payment).

 

US Serious Mortgage Delinquency Rate Falls to Lowest Level Since 1999

 

Banks have also learned from past mistakes. A foreclosure binge would be very costly to them. It's more profitable for banks, as you alluded to, to keep the homeowner in the house.

 

Sorry to hear that. Sounds absolutely absurd. Any chance you can plant some fruit trees and get an ag exemption or whatever is equivalent there?

 

Banks have far less liability than they had in 2008 also.
The way the system works for most loans is that banks underwrite the loans to Fannie or Freddie underwriting standards. The loan is electronically underwritten by one or the other usually. If Fannie or Fre approve it, they will buy it as long as everything the lender represented on the loan was true and is properly documented. The only ways they have to buy that loan back is if either the loan gets audited and the information originally provided wasn’t accurate or documented, or the loan defaults very early in the life of the loan.
What happened in 2008 was that the manufacturing process was garbage because buybacks were rare, everyone was making money and didn’t wanna rock the boat. But when all the low or no documentation loans went south, Fannie and Freddie began to care an about the quality of what they were getting. They forced a ton of buybacks on lenders and it overwhelmed them.
Lenders learned their lesson and have greatly improved their manufacturing process. Additionally. Fannie and FRE have ways of auto verifying the loan info before it’s delivered, so lenders can’t buy back loans on those cases.
What lenders generally have to do is hold loan loss reserves against their expected default rate. The only way they are at risk is if default rates go up. their LLR isn’t sufficient, their loans aren’t properly documented on the cases where their reps and warrants weren’t waived, and the equity in the homes is less than what they can sell it for. And right now prices are high.
So it’s a very different world.