# 3 million people taking advantage of virus mortgage relief/forebearance



## WhatInThe (Apr 20, 2020)

Around 3 million people have taken advantage of the virus related mortgage forebearance program. The financial sector is getting nervous because the lenders must still make payments to their lenders/bond holders.  

Borrowers can declare a virus related hardship and have a year to get caught up or have the loan modified.

https://www.cnbc.com/2020/04/17/nearly-3-million-borrowers-have-filed-for-mortgage-relief.html


----------



## WhatInThe (May 9, 2020)

That number has now increased to 4.1 million. $890 Billion in unpaid principal. Affecting 11% of FHA loans

https://www.cnbc.com/2020/05/08/mortgage-bailout-swells-to-4point1-million-borrowers.html


----------



## Aunt Bea (May 9, 2020)

Tacking a year's worth of payments on to the back of a thirty-year mortgage can have huge consequences for the borrower.

Basically paying thirty years interest on those mortgage payments if you stay put in the home and carry the mortgage to term.


----------



## Aunt Marg (May 9, 2020)

If there was any integrity within our governing parties, bills would have been passed to order all banks and financial institutions to wave any and all payments, with no consequences.


----------



## gennie (May 9, 2020)

Aunt Marg said:


> If there was any integrity within our governing parties, bills would have been passed to order all banks and financial institutions to wave any and all payments, with no consequences.


Seriously?


----------



## WhatInThe (May 9, 2020)

Aunt Marg said:


> If there was any integrity within our governing parties, bills would have been passed to order all banks and financial institutions to wave any and all payments, with no consequences.


They did for 4 months which probably will wind up being extended and language changed. From what I've read a mortgage must be caught up and/or a  new deal negotiated but renegotiating a loan doesn't alway look good on the credit history.

Already seeing reports of tighter lending standards including higher down payments, higher scores etc. This could work out for buyers in low supply markets because inventory won't sell as easy at higher prices.  But location location location. It all depends. Feel bad for those who did nothing wrong and could've actually paid their loans/mortgages in pre virus economic conditions.


----------



## Aunt Marg (May 9, 2020)

gennie said:


> Seriously?


Yes, seriously.

Governing parties had no problem bailing banks out during the 2008 crash, so why isn't the same being extended to the little guy? What would it hurt (in the big scheme of things) waving payments for a few short months, with no consequences?

None, that's what the consequence would be, but instead, our governing parties have once again shown who matters, and have answered the woes by throwing pocket-change at the general population as a way to mitigate the problem. It's all so laughable.


----------



## Aunt Bea (May 9, 2020)

There is a huge difference between the federal government bailing out those homeowners as compared to issuing an order for a bank to destroy itself by forgiving the loan payments and interest that are being backed by our deposits.  In other situations, the mortgages have already been bundled and sold to investors as a source of income to fund pensions, annuities, mutual funds, etc...

I have no problem with some sort of relief as part of a government stimulus package.


----------



## Aunt Marg (May 9, 2020)

Aunt Bea said:


> There is a huge difference between the federal government bailing out those homeowners as compared to *issuing an order for a bank to destroy itself* by forgiving the loan payments and interest that are being backed by our deposits.
> 
> I have no problem with some sort of relief as part of a government stimulus package.


So long as we have the governing parties that we do at the helm, banking and lending institutions are in good hands.


----------



## WhatInThe (May 9, 2020)

Aunt Bea said:


> .........
> 
> In other situations, the mortgages have already been bundled and sold to investors as a source of income to fund pensions, annuities, mutual funds, etc...
> 
> I have no problem with some sort of relief as part of a government stimulus package.



This is a big issue because they raise the money for the borrower with bonds that pay interest in many cases. Those bondholders include individuals and those funds you mentioned like pension and mutual funds. Everyone thinks banks and lenders are just sitting on a pile of money but they put that money out to work for them(invested it) which they live paycheck to paycheck as well relying on monthly mortgage payments to pay monthly interest on those bonds. They also need enough money for those that want to redeem or cash out their investment.


----------



## Aunt Marg (May 9, 2020)

WhatInThe said:


> This is a big issue because they raise the money for the borrower with bonds that pay interest in many cases. Those bondholders include individuals and those funds you mentioned like pension and mutual funds. Everyone thinks banks and lenders are just sitting on a pile of money but they put that money out to work for them(invested it) which they live paycheck to paycheck as well relying on monthly mortgage payments to pay monthly interest on those bonds. They also need enough money for those that want to redeem or cash out their investment.


It's a sad state of affairs, isn't it, but quarterly profits (in the billions) keep mounting, don't they?


----------



## oldmontana (May 9, 2020)

Aunt Marg said:


> If there was any integrity within our governing parties, bills would have been passed to order all banks and financial institutions to wave any and all payments, with no consequences.


So you do not care if our banks would be forced to close?  Not me..banks have been good for me. 

I think if people owe money they should be responsible and pay the money back. Yes, they could wave payments for a month or so.


----------



## Aunt Marg (May 9, 2020)

oldmontana said:


> So you do not care if our banks would be forced to close?  Not me..banks have been good for me.
> 
> I think if people owe money they should be responsible and pay the money back. *Yes, they could wave payments for a month or so*.


Yes, I believe they could, too, and easily, without hardship.


----------



## Knight (May 9, 2020)

Aunt Marg said:


> Yes, I believe they could, too, and easily, without hardship.


Aunt Marg your suggestion for government dictating to banks & financial institutions I think is flawed. That sets precedence for the government to exercise control whenever it feels necessary or IMO in reality one step closer to socialism. Eventually managing to destroy the foundation of our system of capitalism.

Maybe you endorse socialism so your suggestion works for you. <-------Edit to recognize that comment really isn't needed


----------



## Aunt Marg (May 9, 2020)

Knight said:


> Aunt Marg your suggestion for government dictating to banks & financial institutions I think is flawed. That sets precedence for the government to exercise control whenever it feels necessary or IMO in reality one step closer to socialism. Eventually managing to destroy the foundation of our system of capitalism.
> 
> Maybe you endorse socialism so your suggestion works for you.


Excellent point, Knight. Definitely food for thought.


----------

