A study shows Missed Payments Stabilize In June At Alarming 30% Level.
37 percent of renters and 26 percent of homeowners are concerned that in the next six months they will face an eviction or foreclosure.
This hardship continues to be concentrated among renters, younger and lower-income households, and urban dwellers. Missed payment rates are highest for renters (32 percent), households earning less than $25,000 per year (40 percent), adults under the age of 30 (40 percent), and those living in high-density urban areas (35 percent).
Struggle in May, Struggle in June
Black Knight
Separately Black Knight reports Mortgage Delinquencies Increase Another 20% in May to Hit Highest Level Since 2011.
- After April’s 90% increase in the delinquency rate, another 723,000 homeowners became past due on their mortgages in May. That marks a 20% increase in the national delinquency rate, pushing it to its highest level since late 2011.
- There are now 4.3 million homeowners past due on their mortgages or in active foreclosure – including those in forbearance who have missed scheduled payments as part of their plans – up from 2 million at the end of March
- Serious delinquencies are on the rise as well, increasing by more than 50% over the past two months
- However, Black Knight’s McDash Flash Payment Tracker shows a higher share of payments have been made thus far in June than at the same time in May, suggesting the rise in delinquencies may be leveling off
Foreclosures and Evictions
The initial Cares Act prohibited foreclosures and eviction until May 17.
It was extended until June 30, 2020 under guidelines issued by Fannie Mae, Freddie Mac, FHA, VA and USDA.
On June 17, the FHFA announced that the June 30 moratorium expiration is now extended for Fannie Mae and Freddie Mac mortgages until August 31, 2020.
Rent Rules Vary Widely
In contrast to mortgages, rental evictions vary widely.
Cascading Problems
If you are a small-time landlord in a state where it is hard to evict, you will have a problem paying the mortgage on your property.
How Hard is it To Get Evicted in Your State?
Some states like texas offer no protection. In other states including Massachusetts and Delaware, it is very difficult to evict a non-paying tenant.
For further discussion, please see How Hard is it To Get Evicted in Your State?
Mish
The ad that popped up beside this story promised mortgages for people with poor credit and no job. Haven’t we seen this movie already?
Ridiculous. After the previous mortgage meltdown, lenders again required 20% down payment–with the EXCEPTION of FHA. 3.5% Did not make sense. When does the government make sense? Slowly, but surely, over the years, the required down is very low for what is considered a conventional loan. 3.5% also. They never learn–as in government, politicians, etc.
I have to wonder if this is part of the reason why, while spending from everyone else was way down in May, spending by the bottom 20% was up in May.
Thankfully I was between places to live when this hit. I was staying with my mom a few weeks while I looked for a permanent place. I had just moved back so I wanted to take a look around. As it turned out my new job disappeared and I could not qualify for unemployment. Just starting to get a few hours but no clarity yet as to whether it will get back to anywhere near normal.
Do landlords report late rent?
The short answer: not always. It’s generally optional for landlords to report late rent. And in order for them to report late rent themselves, they generally need to be a member of a credit reporting bureau, which include Equifax, Experian, and TransUnion. Because of this, it’s not that common for late rent to appear on credit scores. If you want to be sure, you can go ahead and ask your individual landlord if they do report late rent payments. It’s possible many will say no or say they don’t report them unless late payments are a consistent problem or extremely late. Landlords are people too, so they may react differently in different situations.
There are, however, some caveats to note: If your landlord uses certain kinds of rent payment services, they may automatically report rent to credit bureaus as part of the service. If you need more information about this, this article by Experian has a list of several payment services that offer a credit reporting service.
You’re also more likely to be vulnerable to your landlord reporting late rent if you’re renting from a property management company or another corporate entity. They might have their own policies they follow regarding late rent without taking individual situations into account.
It’s important to note that if you build up debt with a landlord and the debt is sold to a collection agency, the debt will then appear on your credit report, even if the landlord didn’t previously report your payments. A large amount of debt appearing at once could be a major ding to your credit score.
Wrong. Many landlords report to credit bureaus, and their attempts to collect rent through courts and collection agencies are also reported. Anyone with an eviction on their credit report is radioactive and very few landlords will even consider them.
Missed rent does not impact credit scores. Landlords do not provide a rental rating on your credit report. Evictions will harm your credit report only to other landlords.
Missed rent and mortgage payments are deflationary. Missed rent negatively impacts one’s credit score, which means they can borrow less. Missed mortgage payments are a default, which is a reduction of outstanding debt.
Dow 700K then?
I just put on a short. Probably will be eaten alive, but I am playing with lunch money.
Not just housing:
“Data from the CreditVision Acute Relief Suite point to the ever-changing number of consumers in either a forbearance, deferred payment or a natural disaster situation. As of May 31, the number of accounts in such programs totaled 106 million, nearly three times higher than the 35 million accounts observed on April 30. Accounts in such status included auto loans, credit cards, home equity lines of credit, mortgages, personal loans, retail credit cards and student loans, among other credit products.
Recent TransUnion consumer research found that three in four (74%) consumers who have a financial accommodation are extremely or very confident that they understand the terms. However, financially impacted consumers who have received an accommodation are more concerned about paying bills/loans (90%) vs. those who have not had an accommodation (60%). These individuals also are closer to being unable to pay bills/loans (4.9 weeks vs. 6.4 weeks for those without an accommodation).”
no transunion link as my other comment with link eaten.
“Serious delinquencies are on the rise as well, increasing by more than 50% over the past two months”
…
Delinquencies will get a lot worse as varied stimulus + moratoriums wane.
It will be quite interesting to see how our debt-based monetary system continues to function, while more and more debt goes unpaid.
Wow – this number is depression level. People pay their rent or mortgage with their last dollar because fear of losing housing is real and pervasive. The government has given massive bailouts to Companies and as your earlier blog disclosed – the Republicans are violating the disclosure laws because they are too ashamed to admit who they gave our billions to.
TRILLIONS, there fixed it for you.
No, the disclosure laws can harm companies that legally were eligible for the assistance by disclosing their names and then the public thinking they were going bankrupt. Many companies may have been embarrassed to obtain these loans if they were going to be mentioned publicly. How about the 25 million given to the Kennedy Center and then they fired their employees – that was Democratic funding. What about the large hedge funds that flouted the law and received assistance? They were not the intended recipients but the large banks made sure their biggest clients received the money intended for small businesses. Take your money out of the big banks, your money is an unsecured asset for them. If they go bankrupt, you will be in a long line to get your money. Put it in a credit union, they were open throughout the lockdown, unlike the big banks.
In a world where many people literally do not own anything of substance (phone plan, apartment, leased vehicle, etc)..the road from job loss to destitution, homelessness and unemployability is very short.
Do you know how hard it is to get a job with no fixed address?
“In a world where many people literally do not own anything of substance (phone plan, apartment, leased vehicle, etc)..the road from job loss to destitution, homelessness and unemployability is very short.”
That’s the plan. Why do you think people’s ability to save, has been systematically debased; sued, deemed, found, held; and regulated away?
“Do you know how hard it is to get a job with no fixed address?”
Do you know how easy it is to provide people easy access to a fixed address? It takes, literally, putting a wooden box with some number on it somewhere. Awfully hard to comprehend for the Free Shit Army Fed welfare queens who “own” and run America in the age of incompetence, perhaps. But a pretty simple feat of engineering for the marginally more numerate among us.
But, hey, It’s America. Like literacy, numeracy isn’t PC anymore.
Maybe it was a long weekend, but “numerate” doesn’t mean what you seem to think it does.
…..having a good basic knowledge of arithmetic; able to understand and work with numbers….
Can you restate you point with less spittle and froth?
Not sure what’s so difficult, but I’ll try again:
People not owning anything of substance, hence being vulnerable, is the whole point. Not some unforeseen consequence. It is why we have a central bank and a million pages of entirely arbitrary so called “laws” in the first place: To ensure that productive people have no other option than indentured servitude to those who live off of Fed welfare.
The inability to “get a job” without a fixed address is just more of that same: Pay usury to the leeching class, or starve. Solely and entirely by government dictat, since it’s not as if a free market wouldn’t quickly and cheaply come up with a solution to the problem “lack of a fixed address” unless the junta barred them from doing so.
Why renters need to be armed with AR-15’s.
Not just renters. Everyone. As well as with proper anti armor and anti gunship defenses, and anonymized communication and payment infrastructures.
As the US Founders realized, and the Afghans have been demonstrating for decades by now: the 1st AND 2nd amendment, along with a proper currency, is arbitrary totalitarian tyranny’s sole and only true kryptonite. Anything less, is just childish feelgood theater, to keep the niggas from getting too uppity. In order to ensure the plantation remains “peaceful,” and that everyone respects and bows down for Massa’s “rule of law.”
So tell me how the First Amendment works in Afghanistan? And “proper currency”, are you referring to narco-dollars? I would say that Afghanistan is a demonstration of arbitrary totalitarian tyranny.
The first amendment works by way of there being no arm of government with enough reach to ban any form of speech anywhere in the country, aside from perhaps within a few miles’ reach from central Kabul. Limit government sufficiently, and all the amendments are honored by practical necessity. The first being no different.
So, who is the tyrant again, when every Osama is armed pretty much on an equal footing with the government?
Would yousay arming Antebellum plantation cotton pickers with the same guns Massa had, would result in them facing more tyranny from him, than they did unarmed and under a whip backed up by him having guns and them not?
Most people’s working definition of tyranny, involves a tyrant. Who is, by virtue of having asymmetric arms access, able to enforce his will over that of others, even when it goes against theirs.
But, if your definition somehow differs sufficiently from that, that it encompasses places where every Joe is armed the same as the standing army, I suppose you can “say” darned near anything you feel is not PC enough, is “tyranny.”
So, you’re saying “property is theft”?
And, “from each according to his ability, to each according to his needs”?
When people can’t be evicted, many will opt to not pay the rent. Have they been saving up so that they will be able to catch up in July? Time will tell.
You’d hope they’d have the sense to save up in order to keep cash on hand, rather than waste it all on some pointless “catching up.”
When there are millions of “evictions” in line before theirs, it should take awhile before theirs get processed.
Yep. Lesson learned last time – expect slap on the wrist … namely bad credit for a few years. Better to Blow It on ANYTHING that will leave you only with memories. Hard assets can be taken.
I remember reading a story (2007 or 2008) of someone drowning in debt and down to last $10K. What did he do? Try to reason with lenders (and surrender the $10K)?
Heck no, headed to Vegas for one last hurrah!
Heading to Vegas may be a good foil. But keep the cash. Hidden. If things stay tough for years and decades, there is a huge difference between being officially broke with nothing, and officially broke with ten thousand, or even just a few hundred, one-dollar bills hidden away somewhere.
Once” everyone”; aside from the junta’s favored welfare queens and the security apparatus charged with shaking down others on their behalf; is also broke, black markets which are harder for the leeches to prey on, pop up. And in those, cash tend to be king. So, conserve cash. The rest is just nice-to-haves but hardly essential.
And also, remember that in fiat regimes, no debt is valid nor binding. And neither is any supposed title to “ownership.”
All property is stolen, not earned. Since facilitating this, is the sole and specific purpose of fiat money in the first place.
And since, in all such places, what passes for “law” is also effectively bought by the ones handed privileged access to stolen property by the money printers: No law is valid either. At least no law not predating the central banking rackets are. After that, it’s all just arbitrary graft. And should be treated and “respected” accordingly.