The devil is always in the details. When former President Trump first addressed the Nation, with respect to COVID, we were all told to move along — nothing to see here. Months into the crisis, Trump decreed first, that federal moratoria would be in place which prevented foreclosures or evictions. That then became 28 February 2021. President Biden kicked the can down another month into 31 March 2021 touting his American Rescue Plan which is a massive $1.9 Trillion relief plan — much of it requiring Congressional approval. Six days ago, though, President Biden was candid in his belief that the moratoria should continue through the end of September as reported by CNBC. This is all well and good in that there is currently $25 Billion in current rental aid with yet another $30 Billion targeted in the American Rescue Plan. What remains unclear, though, is precisely how the over sixty percent of all non government backed mortgages are going to get paid.
More on that in a minute. Let’s talk about this potential $55 Billion pool of rental assistance. In similar fashion to the completely inept — and I submit purposeful — unemployment system, the ability to ever access most of that money is based upon a wing and a prayer. Adding to the frustration, there are still millions of Americans whom have yet to even receive their FIRST stimulus checks. Or how about some of those whom applied for the Payroll Protection Program (PPP) and received checks of $19? That is not a typo.
Whether it be Trump’s willful and deliberate indifference or Biden’s pie in the sky requests, none of it matters if the money never reaches its targeted destination. And for those whom reply that most of it has or will I say to you if those are the odds of survival, do you want your family on the other side of most?
Currently, 1 in 5 Americans are behind on their mortgages. And for those preaching that gospel about forbearance, if those owing the money did not apply for an extension beyond 31 December 2020, their payments are due. And here are some pretty stark numbers as unemployment has continued at nearly One Million new claims each week,
“Four months into the pandemic, the 120-day delinquency rate for July spiked to 1.4%,” said Dr. Frank Nothaft, chief economist at CoreLogic. “This was the highest rate in more than 21 years and double the December 2009 Great Recession peak. The spike in delinquency was all the more stunning given the generational low of 0.1% in March.”
On the rental side, the numbers are historically worse albeit the National Association of Realtors (NAR) and their lobbyists would have you believe differently. And that is the quintessential problem: Whose perspective should one believe? Added to that, though, is the simple and salient fact that fraud is on a meteoric rise.
That is the problem that we are faced with today. Pre COVID, a contract meant something. While volumes weren’t the greatest, everyone could count on being paid. Today, though, whether it be the system simply breaks down or blatent dishonesty, the reality is staring down a barrel through the end of September, praying everyone will keep their word, is not for the faint of heart.
Join us this weekend as we have a larger discussion on the Foreclosurepedia Podcast and begin to drill down on the Clients that are paying; the Clients whom are failing; and how we all, together, will make it through COVID.