Mortgage Forbearance

[Coronita]

.

[barnaby33]

Obviously asking for forbearance is kicking the can down the road, but that is pretty much all our society does anymore.

Wall St and the banks aren’t the cause of this crisis, they’re the cause of the LAST crisis from which we never emerged.

I’m asking the question I did, because I want to stimulate thought about how each and every one of us is going to get through this whole. There is a whole lot more financial pain coming, we’ve only just begun the process of getting over this virus and our govt has just printed 2 Trillion dollars.

At least this time, some of it is going to the man on the street (or he’ll soon be living there.)

Josh

[Coronita]

[quote=barnaby33]Obviously asking for forbearance is kicking the can down the road, but that is pretty much all our society does anymore.

Wall St and the banks aren’t the cause of this crisis, they’re the cause of the LAST crisis from which we never emerged.

I’m asking the question I did, because I want to stimulate thought about how each and every one of us is going to get through this whole. There is a whole lot more financial pain coming, we’ve only just begun the process of getting over this virus and our govt has just printed 2 Trillion dollars.

At least this time, some of it is going to the man on the street (or he’ll soon be living there.)

Josh[/quote]

If you don’t mind me asking,

1. how much is left on your mortgage

2. how much is your monthly mortgage

that will give a much more accurate picture of how concerned you really need to be.

[FlyerInHi]

Why not kick the can down the road?
Some people like to play zero % on credit cards and arbitrage that way. Same thing… takes effort if you think it’s worth it.

[svelte]

[quote=barnaby33]
Wall St and the banks aren’t the cause of this crisis, they’re the cause of the LAST crisis from which we never emerged.
[/quote]

You know, it’s always felt that way to me too. Not me personally, but looking at the bigger picture.

[quote=barnaby33]
I’m asking the question I did, because I want to stimulate thought about how each and every one of us is going to get through this whole. There is a whole lot more financial pain coming, we’ve only just begun the process of getting over this virus…
[/quote]

yeah, I think a lot of us including me felt that once things peaked, then around summertime it would all start being just a memory.

This was the week where it dawned on us all that is not going to happen. We’ve held the number of cases down pretty well, and that just means a much wider curve.

I think the only chance we have of getting to something approach normalcy this year is if a vaccine is discovered early on.

Which begs the question you’re asking…how should each of us handle this year? Hoard cash? Just be conservative? Buy while things are cheap?

[Coronita]

imho if you can’t cover 2-3 months of your mortgage without your paycheck, that’s a pretty sorry state of affairs. You have no business being a homeowner. Don’t they say you should have about a year’s worth of emergency funds?

I sort of can understand if you own multiple homes in a area where the economy comes grinding to a halt and no one is paying your rent on time and you managed to spread yourself so thin that your cashflow is really bad and your cash reserves are non-existent
….but we are talking about 1 home, owner occupied, in a family with two incomes. So again, I’ll ask what’s remaining mortgage balance and what’s the monthly mortgage amount?

If we are talking about a measly $1000-2000/month, it’s almost not worth the time or effort to defer paying $3000-6000 total over 3 months. Even if you could put your money into something higher return, you aren’t going to really make that much money from arbitraging $3-6k over 3-4 months. Plus you need to waste your time arguing with the banks just to qualify. Time is money.

Time spent trying to defer 3 months of mortgage would probably be better spent trying to refinance an existing loan to the rock bottom rates we now have, so one can lower monthly payments or total interest paid or both over the remaining 15 year or ep year loan term …assuming you still have a household income.to qualify with….you could probably get that money back refinancing your existing loan to a lower rate, while you still have a job and income to qualify for a new loan… Pick where you want to spend your limited time…..since loan forbearance and refinancing are probably mutually exclusive….I’d like to see someone try to refinance into a lower rate loan right now and at the same time trying to ask for a 3 months loan forbearance…..lol.

And consider this. Let’s say you have a job and financially ok right now, but you decide to play this forbearance game… Bank gives you 3 months forbearance, so you think you are good. 3 months pass, you don’t bother to refinance your existing loan to a lower rate thinking you’ll do it after 3 months….but then the economy gets worse and you really do lose your job. Try refinancing to a lower rate after you are unemployed with no income……Good luck…. Congrats. you just blew your chance of refinancing to a lower rate, lower monthly, and lower total interest…and you are still stuck with your existing mortgage, which has now been extended by 3 months

[svelte]

[quote=Coronita]. So again, I’ll ask what’s remaining mortgage balance and what’s the monthly mortgage amount?
[/quote]

Well to be perfectly honest, all of us know that just leads to the next question: how much are you bringing in each month?

And for Josh to give us his complete financial picture on a public forum wouldn’t be very advisable in my opinion.

So you can ask. I’m just not sure you’re gonna get an answer, especially if Josh is like me.

I can count on my fingers the people who know my complete financial picture and (a) they are all family, and (b) that is by design. My grandfather told me way too many stories from the early 1900s about people getting murdered for their money. The conversations are still vivid in my mind. He was 6 ft 4 and quite the storyteller…one especially vivid memory is him talking to me while we waited out a thunderstorm huddled together in a Ford on the edge of a lake in North Dakota…”don’t touch metal!” he said, for fear we’d get struck by lightning and die. He then proceeded to tell us about a family who was murdered in their home because they had told everyone about their safe full of cash.

But I digress.

[Coronita]

He doesn’t need to provide any of his financial information. I could care less. But I would hope at least he goes through the financial exercise and also thinks about opportunity cost he could be giving up.

If his current loan is .5% or higher than what he could get right now via refinancing, to me refinancing seems like a much better option because you can lower your monthly payment and also save on interest… After a refinance , he could still make the same monthly payment on his new loan so that more of it goes toward principle upfront, over time he could bring in the loan a few years….BUT if the shit hits the fan, he can revert back to the new lower monthly payment if there is a cash crunch. That’s how I essentially brought my 30 year into a 15 year and paid it off in 10. I was making roughly the same mortgage payments all along, and any extra windfall went directly to the principal. I didn’t like the opportunity cost of trading off safety for of no mortgage versus putting everything into a higher return investment back then. Well, funny how quickly that changes.

If you believe 3 months from now your financial situation would significantly change, and you can get into a lower rate loan now, I’d rush to get that done as soon as I could.

You can’t get a new loan or refinance once you are unemployed or significantly furlowed.

[PCinSD]

[quote=FlyerInHi]
Everything you write speaks do me. I feel like I get it whenever you write it.[/quote]

Ikr?

A rare, yet not entirely unexpected Adult Hallmark moment right there. Please update us if you guys hookup.

[barnaby33]

A lower rate won’t buy most of us much. 3 months of cash cushion might. Lets take Coronita’s argument for a test drive. Without giving details I’ll just say, my mortgage rate isn’t going to go much lower and certainly not enough to justify a refi. My family income is down quite a bit, though as of right now I’m certainly not looking over the abyss. I do have savings, I’m not a retard. However those savings are invested, nobody just keeps their money in a mattress not earning interest, the Fed has made sure of that.

So rubber, meet road. I apply for forbearance and miracle of miracles I’m granted it. I get 3 months to save up money I would have spent on my house payment. Sure in 3 months I’ll have to pay it, but 3 months is a long time in Corona-ville. I’ll have thousands more dollars of dry powder when I have to make a decision. Do I pay the money back or hold onto it and try whatever comes next.

What comes next you might add? I don’t actually know, but I suspect. If you were paying attention last time around the Fed played kick the can by allowing the banks to FLAT OUT LIE about their accounting. It also gave them massive cash infusions at below market rates. No perp walks, no cram downs, nothing. This time around the pressure is already mounting to make the relief more consumer oriented. I could absolutely see the govt saying, ok you’re arrears, we’ll buy down a bit of your mortgage or re-finance you at even lower more ludicrous interest to keep you paying something. It would allow the Fed to buy even more paper and not punish any of the people who need a giant financial ass kicking.

So in my fantasy world I’d get 3 months deferral as an intro to a refinance. Now if I were low on equity that is absolutely a bet I’d take. Especially if I were a student of real estate recessions and knew that bottoms were years away.

So why wouldn’t I take the forbearance? If there is zero or low cost it seems like nothing but upside. I mean seriously if you are arguing moral hazard you simply have not paid attention to the entire last decade. Every single entity that was on the Fed bailout tit has become larger and more systemically important at your/my/our expense. You aren’t going to fix that with elections, so the best you can do as a moral human is role with it and try not to drown in what’s coming.
Josh

[Coronita]

Seems like you made up your mind even before posting this thread. since you got it all figured out, I’d say go for it then. Good luck. Hope you get whatever you’re trying to get out of arbitraging 3 months worth of mortgage.

I didn’t say you were a moron, it’s pretty obvious you aren’t. But since no one should be 100% invested all the time, I’d figure you would have some invested and some in cash for emergencies and you would adjust that percentage based on the prevailing economic climate as most rationale people would do, and those extra 3 months are almost like needles in a haystack.

But if you just sort of have sour grapes that some people are getting a bailout and you feel like somehow you are losing out if you don’t try to grab some of these forbearance bailout, as it sounds like in your last post, and you will be upset that other people got something and you didn’t, then maybe it’s worth it for you to do it since it seems like it would make you happy that you got some cheese.

I don’t know what you are really trying to accomplish here, since you don’t seem to need the 3 month of deferred money. But do what makes you happy.

[Coronita]

Oh, and it’s erroneous to compare doing this to playing with $0 credit card balance transfer offers to push out a balanced owed on one credit by transferring to one or multiple cards.

Playing the $0 balance transfer offers with credit cards, you arent doing anything to misrepresent your finances in order to play the game, unless you lied on your credit application to get more credit cards. There’s no dishonesty involved in this game.

Trying to take advantage of this mortgage forbearance when you really don’t have a financial hardship is basically misrepresenting your finances IE dishonest. That’s like having a front line ER doctor, living in an area hard hit with a lot of job losses where the majority of the tenants are hourly workers in retail or entertainment who really can’t pay their rent now, telling his landlord he refuses to pay rent for the next 3-4 months because he was financially affected by the coronavirus like everyone else, but in reality he’s working and being paid everyday+overtime. Or someone that rents an AirBnb rental from a host, and on the last day, drops a bunch of bedbugs into the room, intentionally gets bitten, and wants a full refund for his/her stay…. I guess there’s nothing wrong with that too.

[FlyerInHi]

Barnaby said his income went down quite a bit. So if he’s like most Americans, he can no longer afford to pay his mortgage. Not sure what the standards are, but I would encourage Americans to apply based on 1/3 of income cost of housing.

I don’t know barnaby’s situation, but generally speaking, if you have a loss of income, yes, definitely apply. The worse they can do is say no.

[FlyerInHi]

[quote=PCinSD][quote=FlyerInHi]
Everything you write speaks do me. I feel like I get it whenever you write it.[/quote]

Ikr?

A rare, yet not entirely unexpected Adult Hallmark moment right there. Please update us if you guys hookup.[/quote]

Scaredy is the most beautiful writer here. There’s a certain quality, a je ne sais quoi. I am in admiration, in love.

[ltsddd]

[quote=barnaby33]So why wouldn’t I take the forbearance? If there is zero or low cost it seems like nothing but upside. I mean seriously if you are arguing moral hazard you simply have not paid attention to the entire last decade. Every single entity that was on the Fed bailout tit has become larger and more systemically important at your/my/our expense. You aren’t going to fix that with elections, so the best you can do as a moral human is role with it and try not to drown in what’s coming.
Josh[/quote]

Go for it. If this crossed your mind then that means you probably fear for the worst. It’s a prudent thing to take steps that you think would alleviate some of the stress/pressure. At the end of the day you must do what’s best to protect you and your family. The system is set up for people to apply. It’s up to the people on the other side of the table to make the decision to approve or not.

I personally think this bailout, like many before and after, is skewed to enrich the super rich. While the peasants get peanuts.

munchkin thinks $1200 should lasts 10 weeks:
https://www.businessinsider.com/mnuchin-criticized-seemingly-suggesting-stimulus-checks-could-last-10-weeks-2020-4

while the rich are going for the bigger piece of the pie:
https://www.bloomberg.com/opinion/articles/2020-04-16/coronavirus-do-hedge-funds-deserve-bailouts

https://www.marketwatch.com/story/its-a-complete-abomination-says-wall-street-money-manager-about-hedge-funds-applying-for-bailouts-from-small-business-recovery-funds-2020-04-14

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