How The Banks are Setting You Up for Foreclosure

Recently the federal reserve released housing market data with many indicators of a mortgage crisis. The data states that nearly ⅓ of U.S. apartment renters didn’t pay their rent, and many business/commercial renters also defaulted on rent payments. Currently the only relief renters, homeowners, and business owners are eligible to qualify for are the ones offered under the CARES act. Federal and state laws have been enacted for prevention of eviction and handlings of eviction in court cases, businesses are eligible for “forgivable” loans under the SBA, and mortgage owners are allowed to receive a 180 day deferment plan. Although certain things seem to be getting better as the federal government does everything in its possibility in order to prevent major economic damage, issues still continue arising in many different markets. Especially in the real estate market. 

The first big issue in the real estate market is that the mortgage forbearance programs that are being offered by the majority of mortgage lenders are only offered in an almost unpayable lump sum payment form. The second big issue that’s arising in the real estate market is the inability to get loans from banks now. Many big banks including J.P. Morgan, are struggling to figure out how to lend out money to businesses, and everyday people alike. With a lack of federal guidance and a short period of time big and small banks don’t even know how to begin processing loan applications and other CARES acts programs. This could lead to an even bigger time crunch for those already struggling to pay off mortgage debt. 

Although banks are unsure of how to handle loan processes, they are still being pressured by investors to keep collecting their money. This is resulting in many banks closing down and even rejecting new loans that are being requested for by members of the banks. This problem only starts getting worse and worse and banks start getting tighter and tighter with their money as a result of skyrocketing unemployment rates. This affects the real estate market by giving people very little loan modification possibilities, low chances of taking out a personal loan in order to somehow be able to keep their home, and smaller and smaller options of being able to wiggle out of a tight situation. 

With every bank and lender setting you up for major foreclosure, you might be wondering what direction to head in next to avoid feeling the full effect of the 2020 mortgage crisis. One of the options would be to attempt to sell your home now, but with the effects of the shutdown, many people are too scared to go house shopping at the moment. Another option would be to short sale the property to a willing investor who is experienced in credit repair advice, short sales, and negotiation with lending institutions. If someone you know is worried about finding out a way to pay their mortgage, deal with the banks, or is interested in finding out a little more about a short sale, feel free to contact (Rob’s preferred contact number). 

Sources: https://www.cnbc.com/2020/04/02/jpmorgan-says-its-not-ready-for-small-business-loan-applications-as-banks-await-treasury-guidance.html