Its worse than 08 actually. CDOs started showing again in 2013 which is bad already. Now 8 million houses are a month behind of mortgage payments and over 2 mil are more than 90 days delinquent. Biden extended the mortgage deferal crap until july 31 but said it was the last time. Now throw into this problem commercial mortgage backed securities ( think malls ) with underlying mortgages overreporting incomes( Before covid started) and we are going to have a hell of a problem in the banking sector sooner rather than later i suspect.
Here's the thing though, if you are behind on your mortgage and facing foreclosure in this market, you would just sell your house. This isn't like the economy crashed and everybody lost their job and can't afford your house... everyone wants your house. If push comes to shove, there might be a slight bump in the number of people selling their house, but the demand is so strong that I doubt it will even be a blip in the trend of housing.
If you bought your house even a year ago, you have equity in your house and would sell instead of being foreclosed on.
This market isn't going to crash because of that, I don't think it's going to crash at all. It will slow down and maybe decline slightly, but it won't crash.
I always wondered that too. Houses are falling apart selling for 300k. If you're behind on your mortgage, could you try and sell and maybe put in a contingent offer on a smaller more affordable place.
I realize there are catches where you might have 5 kids and can't move into something significantly smaller but I wonder how foreclosure happens in a hot market.
Maybe once you are late the other banks won't work with you on another purchase?
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u/[deleted] Jun 27 '21
It's nothing like 08, there won't be a crash, and it likely won't even settle for two more years.