A few weeks ago, I heard the “Shark Tank” lady, Barbara Corcoran say that real estate was going to continue to flourish unabated. She is supposed to know what she talks about, as does Lawrence Yun, the chief economist for the National Association of Realtors®, who echoes her enthusiasm.
Yet something started in August that not many people are talking about. Remember back in the spring when lenders were offering forbearance on mortgage loans to those who couldn’t make their payments? That sounded like a dilly of an idea to a lot of people. All they heard was “no mortgage payment for three months”. They totally lost the part about “until you can get back on your feet and catch up on the payments”. There are several different ways to handle repayment of forbearance, including a lump sum payment or loan restructure of time or payment amount. That’s not the problem.
The trouble starts because the borrower has to have the means to pay back the money. Some people are still out of work. With folks involved in service, food, or retail there are employers that have been around for decades filing bankruptcy. Those jobs will never come back. Some people have lost jobs simply because they required too much personal contact, and those jobs have been restructured.
Georgia is a non-judicial foreclosure state, meaning if you are ninety days past due, the lender can foreclose without court approval. Ninety days was August. If you still can’t pay the mortgage, and the lender will not restructure your loan, you may have a problem. I’m already hearing about them.
Remember the recession from hell? It all started with politicians helping bankers monkey around to create a false economy and real estate bubble. Does any of what I’m saying sound familiar? I don’t know how many mortgages or how much money would be involved if these loans start going under. I do know that for the first time in several years I’m getting calls from major lenders wanting to know if I would like to handle foreclosures in my area.
If you are having this problem, try to work out a payment plan with your lender. If you can’t do that consider a “short sale” to avoid foreclosure? But maybe Barbara Corcoran is correct and we’ll just keep on skipping down the golden streets of delirium. After all, everything else about 2020 is going so well!