Stop in for a cup of coffee

I’m telling you though, now is a BAD time to buy property. Wait it out.

Harvard Business news had an article Tuesday, it’s behind a paid firewall or I’d link it. Anyway, right now, an estimated 22% of American mortgage holding citizens would be at the start of foreclosure IF TRUMP had not signed that first EO putting a pause on evictions and foreclosures. State Governors took it further to include renters from having to pay rent. Now I’m not praising Trump here, Biden has extended that until September 30th.

the problem is, those 22% aren’t just going to suddenly get caught up whenever that finally does expire. There’s going to be another housing market bubble burst here like in 08/09. Banks have already instituted policies to try and avoid it but eventually, they’re gonna want their money. One such policy is suspending the interested from accumulating from March of 2020, until this expires. But the principal is still gonna be due.
Now some people might say “oh, they’ll just pause everything, forgive the late fees and add the missed payments on to the end of the loan, no harm no foul” . Some banks might, but most won’t. Reason being, Banks have to show cash flow in. Just like in 08, they’re not going to take a zero, they’ll foreclose and sell it as what ever they can get out of it, just to get it off their books and not show a bad loan. There’s also laws that congress would have to change to let them modify those loan terms even if they did want to move them to the end and forgive the missed/past due.

in short, this is why getting a loan for a construction of a house is soooo difficult right now. The banks are for seeing a housing value burst in the next 6-9 months. And they have said as much when we’ve tried.