FORT LAUDERDALE, Fla. (PRWEB) July 06, 2020
Many people are aware of the subprime borrower who represented a large risk to lenders. Many of which had credit scores below 670 along with other negative information on their credit report. Many of those borrowers failed to read the fine print on their contracts.
Another element along with the subprime borrower was the infamous rating agency The Moody Standard. Which may have been designed for the people, but was a funded organization by the banks that had no concern for investors only themselves. Despite 75% of C.D.O. receiving the highest safety rating; nonetheless, 70% of them defaulted. For people who find themselves in a difficult situation today cash for houses could help lift the burden of not being able to pay a mortgage bill.
“The Collateralized Debt Obligation is a complex structured finance product that is backed by a pool of loans and other assets and sold to institutional investors. A C.D.O. is a particular type of derivatives because, as its name implies, its value is derived from underlying assets. These assets become the collateral if the loan default,” according to Carla Tardi of Investopedia.
And to add to the web investment banks would buy mortgages from lenders. Then would sell to investors as Mortgage-Backed Securities. Meaning the home buyers are now paying investors their mortgage payments. The government in order to boost mortgage lending used Fannie Mae and Freddie Mac to do the same thing. Every time lenders sold off their rights to their interest payments to investors. Lenders then get their money back in turn loan out that money again. Adding credit default swaps from insures did not help the situation. Which are derivatives that payout if a mortgage borrower defaults. If a lender is concerned that a borrower could default on a loan, the lender could use CDS to offset or just swap that risk. The Plain Bagel has a simple YouTube explanation “The 2008 Financial Crisis- 5 Minute History Lesson.”
Everything was good so long as the real estate market continued to rise. But in September 2008 Lehman Brothers an investment bank was the largest bankruptcy in U.S. history. For those wondering who is offering cash for houses in Florida the team at Rockvale Property Mtg, LLC has recently decided to expand their market into Florida. Founder Robert M. Garcia stated "It was not an easy decision for the board to make with so much risk and uncertainty. We do have a great track record around the nation and an experienced team ready to help homeowners interested in house selling as is. We are here to offer homeowners tips on how they can avoid a foreclosure and how they can avoid a personal disaster like many did during the last housing recession. Feel free to contact one of our team members for any questions you may have."
Then in 2010, The Dodd-Frank Act was introduced to crack down on financial institutions in hopes of this crisis not repeating itself. So by learning from the past the government has put in acts in place to crack down and try to ensure to the people that something of this magnitude would not repeat itself. Today many experts are saying the next real estate market correction will be due to other elements. Having many people lining up ready to receive cash for houses.
According to Mark Moss an Investor and Entrepreneur who is dedicated to educating others to help them from making the same mistakes as in the past. There are three main components that will lead to a real estate market crash. First, he talks about debt load “U.S. housing debt has risen for 23 straight quarters. $14 trillion as of April.”
Second, is the lack of income for people. “15-20% unemployment rate today, up from 3.7% via U.S. Bureau of Labor Statistics says 15% is way to low. Experts say 42% of job layoffs may never come back,” says Mark Moss. For those who know a neighbor interested in a cash for houses offer the team at Rockvale Property Mtg, LLC has a finders fee contact them for more details at (804)315-9099.
"Working with Robert Garcia has been awesome. I quickly received a fair, all-cash offer to purchase my house and closed when I requested. I was very happy with the offer I received, and I appreciated how comfortable we were made to feel throughout the closing process. If you are looking to sell your house fast, I highly recommend working with Robert."
Tammy & Richard Ferguson
A third attribute that may delay the inevitable of a real estate mortgage correction is The Mortgage Forbearance Program recently implemented for those during the COVID-19 pandemic.
According to Diana Olick "The relief effort blocks lenders from starting foreclosure proceedings on federally backed loans for at least 60 days starting on March 18. Second, it gives you the option to request up to 180 days of forbearance, meaning you can either pause or reduce your mortgage payments."
A quick reminder of federally backed mortgages are HUD, FHA, VA, Fannie Mae, Freddie Mac, and USDA. This relief program has recently been announced by federal and state governments, as well as financial institutions, and loan services. Therefore if a mortgage lender has no relief for a homeowner than cash for houses may be a solution in Florida. Robert M. Garcia and his team prides themselves in a win win situation for all. Check out RobyBuysHouses.com for more info or contact them at Robert@RobyBuysHouses.com. "Those who have been hit hard should urgently contact your mortgage loan service company; hence, even if you can only pay a portion of your mortgage." Robert M. Garcia added.
The head of Colony Capital, a large real estate investment firm said recently, "That the mortgage market is read to collapse." That is the Mortgage Backed Securities (MBS) and derivatives tied to those. He said that regulators should remove the 'market to market' requirements. There will be defaults across the board. There are over $4 trillion of those mortgage securities. As of now 9% of all mortgages are in COVID-19 Forbearance Plans. Today the average households biggest expense is their mortgage payment which averages to about 33% of all expenses."
Forbearance is when your mortgage service company, that's the entity that sends your mortgage statement and manages your loan, or lender allows you to pause or reduce your payments for a limited period of time.
The new CARES Act introduced by the federal act is equipped with two protections for homeowners with federally backed mortgages.
First a lender may not start a foreclosure on you for 60 days after March 18. A lender has been prohibited to start a judicial or non judicial foreclosure on you, or even from trying to finalize a foreclosure judgement or the attempt of a sale.
According to Investopedia "Judicial foreclosure refers to foreclosure cases that go through the court system."
The non-judicial foreclosure is available to deeds of trust granted with power-of-sale clauses. According to Cornell University Law "Some jurisdictions allow lenders to foreclose property without getting a court order first." If prior to COVID-19 pandemic you where heading down a foreclosure and looking at cash for houses there is a quick way to contact the Rockvale Property Mtg, LLC team at (804)315-9099 and get a no-hidden fee offer on your property.
The second part is if a homeowner is experiencing financial hardship during this crisis like many people are, you could contact your lender and responsibly request a forbearance for up to a total of 180 days. There is also a contingency where you may be approved for a second 180 days.
This program will come with zero additional fees, penalties, or additional interest added to your account. For those who don't have a federally backed mortgage like many people do, it is still possible to be aided with relief efforts by contacting your loan service or even your state.
Conclusion- Cash for houses is a great option to avoid foreclosure and get a quality offer before we see a drop in the real estate market where the market will be flooded with inventory. All though the government introduced The Dodd-Frank Act in 2010 it does not absolutely mean we may not have another devastating real estate market crash. It seems that fueling the market with debt load, unemployment, and mortgage forbearance program that a correction is inevitable. After the second 180 day grace period of forbearance will people be employed, and how will many small businesses rebound? Small businesses account for 44% of U.S. economic activity and create two-thirds of net new jobs. Therefore cash for houses today will help avoid the hassle many are heading towards next year. So after 2008 the real estate market plummeted and many homeowners were left underwater. Today prices are still in good shape. Homeowners who are looking to downsize your home or are ready to relocate for a new career can contact Robert M. Garcia at (804)315-9099. Rockvale Property Mtg, LLC is a new expanding company in the Florida market but has had many years of success and experience in other markets in the U.S. Is today the chance of receiving a cash for houses offer while the market is still steady?