And it's not just Downpayments. Average Debt to Income Ratios today are comparable to mid-2000s.
Meaning that homebuyer incomes, on average, are just as stretched in their ability to afford the mortgage payments. pic.twitter.com/3wIVJvidCS
— Nick Gerli (@nickgerli1) August 14, 2022
But on average Mortgage Lending Standards are just as bad by the two most important metrics of Borrower ability to repay: Downpayment / DTI.
That suggests there will be lots of Foreclosures coming down the pike in 2022/23 as the Housing Crash and Recession play out.
— Nick Gerli (@nickgerli1) August 14, 2022
We're not going to be so lucky this time around. There's a huge backlog of Foreclosures from pandemic that will roll through in next year.
Expect that Blue Foreclosure line to spike and spike big time. pic.twitter.com/XYlJ189IDz
— Nick Gerli (@nickgerli1) August 14, 2022
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We’re actually thinking about reverse mortgaging the house since the man hasn’t returned to work and is unlikely to. Don’t like the idea but don’t see any other option at this point. We’d take the lump sum and bank it and still be allowed to live in the house mortgage free as long as we want. I told him if he doesn’t do it before the market crashes, forgetaboutit. The equity will be wiped out then what I don’t know. Our mortgage is only $1200 a month, that’s barely RENT at this point.
That’s not rent. Try $2500.
Reverse Mortgage: The Pros and Cons
There isn’t a statistic that isn’t remotely alarming
now if you are paying the slightest bit of attention.
Wake the fuck up if you don’t see that.
The world is about to burn down.
Good prediction. In which case, funds obtained from a reverse mortgage will be worthless if they are deposited at a bank. Use the funds NOW on tangible pleasures or foolish activities, whatever they may be. Wine/women/song? Travel? Liquor? Ammo? But not a pile of greenbacks that are neutered because of some novel government decree like “bank holiday” or some such malarky.
Says the guy who is now “all cash”.
I told him to put a chunk into gold and have it ON HAND but I doubt he listens.
I most assuredly didn’t listen to that noise.
Fuck gold.
Better buy all the lead you can.
The only heavy metal that will matter when it all goes to shit.
I have no idea wtf you are even talking about. But I guess if you don’t have heirs it doesn’t matter.
Everything I know about mortgages is from Old French morgage (13c.), mort gaige, literally “dead pledge”
Tough choices for millions of people are coming soon. It’s nearly impossible to make decisions when the money itself is losing value so fast. A pile of $s isn’t going to help save you for very long. Inflation will destroy 90% of society the way I see it. This economic mess that we are in doesn’t end with a short recession then a recovery. In my view it ends with a currency collapse. Your house will always be a house but the $ will be nothing. Don’t give up, get to work and stay in front of inflation for as long as you can. Unless you have no ability to work, I would pay the house down.
It’s not mortgage free, you just don’t have to pay it now, but rest assured the debt accumulates against your estate every month. You will even get a statement showing how much debt is added each month, the opposite of a payment. You pull the equity and create an increasing debt load against the house guaranteeing the bank gets it all in the end. Fine if you have no beneficiaries or heirs, terrible for them if you do.
Not to mention, it removes all incentive to “invest” in your house, new roof needed, what’s the point?, new Hvac needed, why? it all becomes a big waste of money as you or your heirs will never see the dividend. You really going to install a new roof for the bank? New wood floors for the bank?
Reverse mortgages suck, bottom line.
I have noticed properties now staying on market much longer, but no real significant price drops as of yet,that said,it’s coming.
In a lot of markets, the % of homes selling above listing price is way down.
It’s funny how for so long prices should drop, but they never seem to.
Just sold a flip by owner with only 5 days on market. Full price offer, 2% realtor fee, and $500 in closing. Profit: $115K. Not here yet…
So how do you trade this to make a fortune?
Call Michael Burry.
Go long the VIX
Get your son a job as a nat gas expert in Ukraine.
Time to shake the fuck out of the used condom and resell to the next fool.
Off topic, but related: How often do you think Slick used a condom when he forced himself on women while State Troopers were standing guard?
I am starting a build in rural south GA downsizing from 3300 sq ft to 2100 sq ft with a 900 sq ft workshop in the backyard. I am going from gas/electric to total electric with deep well/septic tank and the new house will have a 12kw solar panel array. The estimated selling price of my 30 year old home in a upper middle class neighborhood in Atlanta is $100k more than what the new house on 1.5 acres is going to cost to build with the workshop. It is a win-win for me I am retired USAF and I will be an hour away from two major military bases and it is currently 2.5 hour trip in the current house. New house will be more energy efficient and running on solar power for a much lower utility bill. Property taxes are lower. Groceries will be lower buying at the military bases. Maintenance prescriptions will be filled no-charge at the military hospital instead of jumping through the paperwork hoops with local pharmacies and Tricare. I will be 45 minutes from River Street in Savannah. it takes me 45 minutes to get to Alpharetta that is 12 miles away. I am tired of Atlanta.
Are you a woman?
Makes sense.
All I can ad is, vultures have to eat too. Watch them swoop down on the carrion.
I have empathy for those that may be in trouble with mortgages.
I recall my dad saying, if you’re going to dance , you have to pay the fiddler.
And Auntie would add; if going to politic, you have to play the diddler.
Foreclosures??
You mean like the foreclosure ‘pig in the python’ of 2009, which was a disaster of a problem – until the banks decided they could simply declare (and value) their outstanding mortgages as “current” and “money good” even though there hadn’t been payments made for months already?
It will be interesting to see how many people stop paying mortgages when their equity turns negative. I am seeing huge asking price reductions in homes for sale in my area. It will not be long before new home construction begins to dry up, and the construction related jobs will go away, forcing ever more people to need to sell.
The real estate market here is getting to standoff. Little moving, few new listings and while the odd price drop happens, most are holding out for the higher price.
If something comes online at a reasonable price, it is gone in a day or two. The overpriced stuff just sits, for weeks and even months.
When the dam finally breaks, look out, the race to sell is going to crash the prices. Those who have been greedy are going to get undercut by those about to go under-water desperately trying to bail out. 2% increase on adjustable rate mortgages should pull the plug.
Mid to end of 2024 the SHTF IMO.
Jingle mail will be a thing again.