Do you think we are going to see a high escalation of foreclosure homes in Real Estate market in the coming year ?
I think a noticeable rise is possible, but I think there will be some legislation written to protect home owners based on verifiable hardships.
A friend told me the bank said he could pay the interest on the mortgage for 3 months . He would be responsible to pay the full amount he owned on the mortgage on the 4th month. So he is paying $1500 a month and will have to pay $4500 the 4th month plus 4th month. If your not working where does the bank think your going to get the money?
Missing mortgage payments is a problem, and forbearance agreements can help there, but nobody’s talking about the gorilla in the room: the bond holder agreements. The flow path of a mortgage payment is from the borrower, to the servicer, then to the bond holder (since every mortgage is bundled into securities). The government can order the servicer to let the borrower miss payments, but the securities are legal documents, and no one knows or talks about what’s going to happen when the bond holders don’t get paid the money on the schedule that is spelled out in the securities agreements. The CARES act didn’t address what should happen when that breaker trips.