Black Knight reports More than 2.9 Million in Forbearance, 5.5% of All Mortgages
Key Details
- As of April 16, more than 2.9 million homeowners – or 5.5% of all mortgages – have entered into COVID-19 mortgage forbearance plans
- This population represents $651 billion in unpaid principal and includes 4.9% of all GSE-backed loans and 7.6% of FHA/VA loans
- At today’s level, mortgage servicers would be bound to advance $2.3 billion of principal and interest payments per month to holders of government-backed mortgage securities on COVID-19-related forbearances
- Another $1.1 billion per month in lost funds will be faced by those with portfolio-held or privately securitized mortgages
Forbearance Totals
Payment Forbearance Under Cares Act
On March 27, 2020, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act (also known as the CARES Act) into law. A provision of the CARES Act allows borrowers with federally backed mortgages to request temporary loan forbearance for up to 180 days. Borrowers also have the right to apply for an extension of another 180 days of forbearance.
Once a borrower requests hardship forbearance due to the COVID-19 pandemic, the act requires the servicer to offer a CARES Act forbearance.
Pitfalls
Forbes warns of Mortgage Forbearance Pitfalls.
John Ulzheimer, an Atlanta-based credit expert formerly of FICO and Equifax, warns of a potential balloon payment.
“If the lender or servicer demands that you pay back the deferred amount all at once or in an otherwise expedited manner, that could be impossible for the borrower.”
Unfortunately, having a mortgage servicer ask for a “balloon” payment once your forbearance period ends is a very real possibility. Borrowers from multiple national banks have reportedly been informed of the need to repay any delayed payments in a lump sum at a future date.
Three Things Not to Do
- Don’t apply for forbearance if you don’t need to.
- Make sure you understand the terms being offered. A huge balloon payment at the end could do you in.
- Don’t pay your mortgage with a credit card. The interest rates are outrageous.
Very Ugly Setup
Over 22 million people have filed for unemployment. I discuss the numbers in With Over 22 Million Claims, What’s the Unemployment Rate?
The unfortunate answer is around 18%. That is a bit better than my earlier estimates of 20-22%. But it may be a bit optimistic.
Some states will be much worse. For example, Over 25% of Michigan Workforce Filed For Unemployment.
A recent number crunch on Michigan yields an unemployment rate of 24%-29%, truly a disaster.
No V-Shaped Recovery
Add it all up and you should quickly arrive at the correct viewpoint: The Covid-19 Recession Will Be Deeper Than the Great Financial Crisis.
Mike “Mish” Shedlock
What’s up with the Repo Markets?
I’m sure most of you that follow Mish are aware that issues with Wall Street began on September 17th, 4 months before coronavirus…
On Oct 8, at a speaking event in Denver at the National Association of Business Economists, Fed Chairman Powell “acknowledged that a larger, long-term bailout of Wall Street is coming…”
This raises the question, under what pretext would the Fed / Government have rolled out a bailout if not for coronavirus?
So which is more important health or money for the older rich establishment ruling class ? If the goverment does not pay to keep all of us safe young and old, then the death rate could be much higher, and 90% of the ones dying are the establishment class both Democrats and Republicans over 65 years of age! They have older children and grandchildren that will get infected and pass on the virus to them if they go back to work. Unless the affluent older generation self isolate from their families till a vaccine is produced which could take 18 months to 3 years, that’s gonna bring a whole of loneliness, depression
and misery. The older people money cannot buy them companionship and in person human interaction from there younger immediate family with Covid 19 around unless everyone is safe!
Covid 19 might show the older neoliberal capitalist, a predatory, extracful, wasteful and polluting economic system, a thing or two about what is really important in life…ie supportive, nurturing, loving, caring and empathetic to ALL of humanity and our home mother earth.
I read a story out of Detroit a week or so ago. Small auto parts supplier with 50 fuloughed employees was being pressured by the auto companies to get production going again. His problem few of his employees were willing to return to work out of health concerns and the fact that unemployment plus that temporary $600 weekly stipend made staying home, at least for the short term, easier if not more lucrative than going to a $12/hour job.
12 bucks an hour ain’t worth killin’ gramma over.
we may never have a covid 19 vaccine
Don’t bet on vaccine to protect us from Covid-19, says world health expert
Professor of global health at Imperial College, London warns we ‘may have to adapt’ to virus
Virus research has never been a priority since there is no money in it. There is more money in treating the symptoms.
A lot of people are making more money on unemployment payments than they did working. In addition to more people being eligible (self employed, gig workers) people get paid their normal benefit + $600/week. If you were making $12/hr that would be $480/week. You unemployment benefit is around $800/week. Work is for suckers.
That’s true. But remember that state unemployment maxes out at some often arbitrary set figure. For instance, the max in CA is $450/week. It has been at this number for at least 12 years. Last time I looked at this, MA had the highest unemployment payout int he USA, something like mid-$600’s/week.
September 24. Mark that date on your calendar. Hear me now and believe me later.
what happens on September 24?
It gets postponed to 2021 because of the virus ?
Something yawn inducing no doubt. Clock strikes midnight and it’s September 25th.
How Long will a 2 trillion dollar stimulus package last? The US GDP in 2019 was 21 trillion dollars or about
1.75 trillion a month! Let’s say with the he stay st home orders and most of the economy shut down, GDP drops 50% or 0.875 trillion a month starting in March. So 2 trillion stimulus will cover about 2.5 months worth of the decline in GDP. That means if there isn’t another stimulus package by mid may the economy will start to freeze again and the stock market would take another dive south. If the economy opens up gradually or 20% in June, then a second wave of stimulus might cover 500 billion short fall a month instead of 875 billion, so an additional 2 trillion might cover 3-4 months worth of GDP shortfall and be enough till October 2020 before a 3rd round is needed.
Any delays and the stock markets could drop quickly.
Based on the inverse head and shoulders in the SPY between the 217 lows on march 26th and the neckline breakout at 265 on April 6th, projecting an upside target of around 313 sometimes around Friday May 8th based on the angle of ascent!
If Congress does not act quickly, the drop would be quick and in a worst case scenario if there are additional delays, the SPY could fall to the 2014 support area around 191 before we see a meaningful rebound.
“Stimulus” can’t win the battle against those who simply are in no mood to spend. This crisis has revealed gaping holes in personal finances. This crisis is big enough to force people to make the conscious decision to reduce risks in their lives. People will be saving for bad times instead of resuming purchases of lattes, dining out, overpriced SUV’s, organic food, and worthless college degrees. The stimulus would be an attempt to shore up the previous levels of oppulance.
Yes I agree, people are going to be more in touch with the WE side of things vs. the ME selfish side of neolibral capitalism. Predatory, parasitic, extracfull, wasteful is gonna be reduced and local, community, public and social goverment support will increase.
Making a living wage
for the Z generation will be a goverment priority to be able to support real and long lasting growth in the economy. Financilization by printing money to buy stocks and real estate by millenials who are mostly affected by Covid 19 will continue, but will not be able to support higher prices because interest rates are now at zero or negative and wages are not rising to cover higher prices and higher mortgage payments.
This real estate racket could fall like the house of cards in the next few years and there could be a reset, where real estate prices decline and real wages through a goverment jobs program rise until more and more of the younger generation could afford a home and move back up to the middle class.
Covid 19 might be a blessing in disguise that could reshape and restructure the world economies and reverse the distribution of wealth from the older rich to the younger disenfranchised population
With covid and mortgage delinquencies, I expect anyone carrying covid, especially the elderly or persons deemed not ‘essential’ to society, will eventually be herded into now-empty stadiums or other large facilities for holding people.
The government will seal the doors shut and come back in a couple years to bury them.
Bill and Melinda’s https://www.youtube.com/watch?v=6TffC_aPLwU
Saturday, April 18, 2020
Unemployment To Soar As Small Business Firings Start
Posted by Bruce Wilds
18 Apr 2020
The Paycheck Protection Program or PPP was funded with $350 billion in the last stimulus bill, this money is now gone. Of the thirty million small businesses in America, only 1.7 million received money from the 2.3 trillion dollar aid package passed to help sustain America during this difficult time. If the government blew through this money and was only was able to help only around 5% of small businesses it is difficult to think another 250 billion dollars will set things straight. Clearly, because the government made promises it delayed the wave of firing while companies waited for help.
The government has failed to keep its promise so now we should expect unemployment to soar as reality sets in. One of the largest problems facing small companies is they are often underfunded and have difficulty getting financing at reasonable rates. Banks find larger companies much more profitable. The sector of the economy most damaged by the covid-19 shutdown is small business. When this is over America will find many small businesses have been decimated and are not able to reopen. Others will never recover and be forced to close within months. Since small businesses employ over 54 million people in America and their importance in the economy should not be underestimated.
The loans are a trap. How many businesses took them on while the feds and the MSM were implying the lockdown would be over in a month, only to find out that it is very open ended. Great! Get people to load up on debt as they are simultaneously bankrupted. You know damn well that the banksters will come out whole
The majority will be over in May or it will get ugly quick…that 1200 will be gone by then.
This may help with all the numbers being tossed about!
Garbage Math
A new housing crisis should add about 2K to the Dow this week.
Since up is down in this brave new world, the BLS should stop doctoring unemployment stats. I figure every percentage point increase is good for at least 500 points!
So you are telling me stocks will rally to 100K?
Ok I guess.
Death rate is way understated and the impact of distancing way understated too.
But people will believe what they want.
my daughter clearly had COVID, she lost taste and smell, had body aches and a cough, but no fever. So she was not tested. She recovered. What causes the deathly response? What is the common denominator?
The death rate is clearly overstated. What New York pulled with the 3700 deaths was utter bullshit. Also, they is a huge insensitive to label something CV-19. In my county along, they listed 2 individuals who were in hospice as CV-19 related deaths. It’s stretch to attribute CV-19 death for someone in Hospice. For heaven sake, they are in hospice. As for social distancing, I agree the concept is beyond ridiculous.
Clearly understated. How many 10s of thousands dies in China. How many died and hospitals and were not tested?
Hell the US is still barely testing. Ridiculous to believe death count is overstated.
I would encourage folks to review the summary of the state lock down edicts which has been published by several leading newspapers. They have compared the competing state lock downs. The one thing consistent across the US is how inconsistent the lock downs are. It’s beyond a joke.
“The one thing consistent across the US is how inconsistent the lock downs are. It’s beyond a joke.”
One size does not fit all. Social distancing is of little concern in rural areas.
I don’t know about the US, but globally it is certainly understated by a wide margin. We still have no idea what’s going on in China, but at least they’ve started to admit they undercounted deaths.
Plenty of countries have incentive to report on the low side, plus many of them don’t give detailed breakdowns (city, county, state, national) like the US has.
We look for truth, but what we find is knowledge, and what we fail to find is certainty
Jacob Bronowski
I believe the total number of deaths has been understated in most countries, especially by China. However, I think the death rate has been overstated. For example, in Santa Clara County, California, blood samples from 3,300 people suggested that 2.5% to 4.5% of the people there have already had Covid-19, 50 to 85 times the number of people that have tested positive.
In the Netherlands, there have been 31,589 cases officially, according to the worldometers tracker. However, 10,000 blood donations were tested for the presence of Covid-19 antibodies and 3% of the donors had Covid-19 antibodies. The population of the Netherlands is 17,280,000. Three percent of that is 518,400. If we use the official number of 3,601 Dutch people that have died of Covid-19, that makes the death rate 0.7%, much lower than the 11.4% death rate calculated by dividing the official number of deaths by the number of positive test results.
There really seems to be no perfect solution to the issue of opening up the economies or maintaining the lockdown. There are trade offs. Maybe the best thing would be for companies and individuals to be left to make the call of what is best thing to do for themselves and their families. For people who have prudently saved for the rainy day, it’s better to lose some income than to risk catching Covid-19. For some families, the financial disaster could be riskier than Covid-19. People who are under 40 and have no one older than 40 in their household should definitely be allowed to make that call.
In my state about 9% of test come back positive. That means 91% of people had symptoms and went though the hassle of getting tested to find out they didn’t have it. Most still believe they have it.
South Korea has tested out the nose. Their numbers are the gold standard. I expect we will end up with the same ratios. They have found very few asymptomatic people. I believe they are correct.
I still predict more than 2,000,000 US DEATHS. The economic calamity is unavoidable with any plan.
“Death rate is way understated…”
Sorry, Mish, but I cannot accept that as likely, much less a fact. There are too many asymptomatic carriers turning up all the time, counting is not being done, a few deaths are being falsely attributed to the virus. According to David Stockan, 146 homeless persons out of 397 tested positive but with no symptoms. (Maybe they’ll get them later).
This virus is NEW – much newer than the common cold which everyone has some immunity to (herd immunity) even though it changes all the time. Once everyone has gotten the virus – and we all will once a mandatory vaccine has been developed – it may have no more of an infection rate than the common cold and a death rate no higher than the flu. What worries me is the possibility that it was engineered to work like AIDS, lying dormant for a time before sudden illness and death.
But we may never know the truth. There appears to be an information war going on with MSM treating it as the new ‘doomsday’, replacing climate change. These guys, who depend on government sources for their ‘information’, are going to lie their asses off if it doesn’t start killing a whole lot of Americans, soon.
I am glad my new state, Oklahoma, hasn’t violated the rights of people by ordering them to stay home. I went to Home Depot yesterday. It wasn’t crowded and people kept their distance from one another. Many wore masks, both sales persons and customers (but not me). Same in Walmart, Academy Sports, and a few other stores that remain open. This is a university town in Tornado Alley and most of the people here are smart and used to dealing with emergencies.
So you don’t believe this virus is real because why? A few pre/asymptomatic carriers at a shelter?
If asymptomatic carriers can spread the virus they would show up in countries that have constrained the virus. South Korea has found very few. China has found very few. The US has found some but always inside an area of rapidly spread so time will tell.
The lowest IFR I have seen is .1%. Thats 340,000 Americans. South Korea has settled at 2% or 6,800,000 Americans. It could be higher in obese America.
We are at the very start of this thing.
“So you don’t believe this virus is real because why?”
I DID NOT SAY THAT AT ALL. The virus is real, new, and, so far, is very contagious. I think it’s quite possible that once most people have had it, or a variant, it won’t that much different. But I DO NOT KNOW AND I DIDN’T SAY I DID KNOW.
I spend $6000 a year on dietary supplements including those that prevent infections.
“South Korea has settled at 2% or 6,800,000 Americans.”
South Korea is densely populated. In Seoul (during normal time), when you walk on the sidewalk, you go the way the crowd goes or you don’t go at all. The virus hit them early. The infection rate would certainly be higher there.
But yes, we are at the start of this.
I don’t believe that the Korean tests are antibody tests, so it is not clear that there has not been deep penetration of the virus into their population.
Antibody testing in both Santa Clara county suggests that 50 to 80 times more people have had the virus than have tested positive for active infection. If true, this is VERY good news.
The Koreans are antibody testing. I haven’t read much about what they are doing because the antibody test hasn’t been around very long. We still don’t even know how often it false positives for HCoV-NL63.
When you have a ton of information that says one thing and then a piece that discounts the whole thing comes along you have to ask questions. I want to believe the high infection rates but they just don’t fit with the information at this point.
We know nothing about his virus medium term or long term. 120 days is all the information we have on it. My biggest fear is reinfection/long term health effects.
This article seems to disagree with your deaths overstated contention. I really don’t care much what China is doing. My only concern is the USA.
Did We Just Blowup the Economy for a Bug with a 0.14% Fatality Rate?
By Chris Centeno, MD / April 18, 2020
If you remember way back to my second Corinavirus post 6 weeks ago, I posted that the fatality rate of this coronavirus was far less than the media was reporting. Now a new Stanford study just supported that idea after testing a large sample of people in one community. The results look much like my initial thoughts, the death rate of coronavirus is nowhere near what has been reported. Let’s dig in.
and I am refinancing, great timing, huh? My job is totally remote, my wife and I own a company that works with builders/developers and the post office, her office is open as essential via the Feds. This whole lock down thing is overblown. The infection penetration is far higher than officials are admitting. The death rate is similarly overstated and is lower. When the whole picture is in focus, many public officials are going to look really stupid, if not criminal
I agree. At this point it’s becoming insane. It’s a complete CYA operation at this point. By edict, they have destroyed millions of American’s lives. I think some of them are aware they made grave errors and are terrified of the political consequences. I heard LA county is approaching 40% unemployment rate. Again, Sweden is going to look far more sane and rational than most Western Countries.
We have reached a point where government officials have yet to admit that there is a real cost in terms of life and health that comes with bringing the economy to a standstill. And these same politicians and experts have yet to show that the benefits of their lockdowns are greater than the costs imposed. The models have been shown to be wrong.
Everyone is entitled to a mistake. But to continue making the same mistake repeatedly, destroying lives, amounts to malice.
In my daily life, I am increasingly seeing my country turn into a tinderbox that the disconnected leaders, elected and unelected, cannot imagine and must not toy with. To do so is dangerous for us all.
Not next month, not next week, not tomorrow. Today is the day for the government-imposed lockdowns to stop.
I would also like to point out several states never lock down. It hasn’t seemed to have change their mortality rate from CV-19. It’s funny how the media likes to slide over that.
I disagree. The total infected is still very low.
South Korea has tested out the nose. Their numbers are the gold standard. I expect we will end up with the same ratios.
The South Korean government’s testing was exemplary, but the South Korean people were hit early and unexpectedly.
In the US, the government isn’t worth a shit but the American people had more time to prepare themselves.
In the end, it’s what the people do that matters; not what the government does.
I understand your argument is hope. I don’t want this thing to destroy our way of life but it has a better chance than any other crisis I have lived through.
We are at the very very start of this. Stay positive.
“I understand your argument is hope.”
No. My argument is Reason. Just because you disagree, doesn’t mean mine are not reasonable.
I expect our way of life to change greatly during the next few years. Maybe it really is the 4th Turning. Some people will get through it all very well. Others may be gone with the wind.
I agree 100%“
The world that we are going to live in for at least the next two to three years will be totally different than what we are used to,” said Sung Won Sohn, president of SS Economics and professor at Loyola Marymount University. LA Times
Too many wishful thinkers, here and in denial of reality!
“Covid-19 Recession Will Be Deeper Than the Great Financial Crisis.”
Yes. But we shouldn’t call the covid recession as most people here knew it was coming, covid or not.
The seems to be a run on nutritional supplements. Orders I used to receive within two days are now taking up to a week. (My main suppliers are Vitacost and Life Extension).
If Americans are increasing supplements in preparation for covid, that’s another reason why things may not be is bad as places hit earlier like South Korea.