4,612,000 (4.6 mil) HouseHolds Couldn't Pay Their Mortgage This Month -Concerned Yet?

Question

What do you mean there isn't a foreclosure tsunami coming this way? Buy right (correctly) now, so you won't regret later.

If you are buying houses at current MLS prices, you are headed for trouble.

The last three properties I bought for my investors were at 85% of current market value AFTER my fee. (yes, I can provide them for you too) What do you think you are doing buying at full cost? Crazy! Plus, they simply took over the 2.75% to 3.5% loans. Properties are in AZ, TX, GA, OH, NOT CA, WA or FL. The market doesn't warrant those areas.

HUD housing report

https://www.huduser.gov/portal/sites/default/files/pdf/Housi...

Gina Stern · Answer

There will likely be a foreclosure condo tsunami, especially in Florida. People, seniors in particular, will not be able to afford the increasing HOAs and assessments, as insurance premiums are going through the roof. No one wants to make too many claims, as they could be dropped by their insurance companies. It is not a pretty picture that is forming out there!

Greg Scott · Answer

@Ken M.

I love the link you sent.  Also, I 100% agree that investors should always be buying below market, which was the important point you were making.

But, I am confused about your first sentence.  The suggestion that a foreclosure tsunami is coming does not seem to be borne out by the report you provided.  There two charts in particular (screen shot below) that show the risk has moderated significantly since 2020.

Ken M. · Answer

.

Here's the rest of the story.

I just bought a property where the seller had THREE unpaid loan mods. Accumulated unpaid debt to the lender. In 2022, 2023, 2024 and was currently in foreclosure in 2025, so he missed payments yet again. He seemingly made no payments because of the *very* generous programs that came about as a result of covid and are still in place. He was offered loan mods and said "sure, I'll take that loan mod, why not".


Well, that's the official story from HUD that "covid made them do it", "my dog ate my homework".

The not so funny thing is, he's working. He has income. In tracking down what went on, it's a far bigger problem/scam than that.

Seems FHA & VA are selling off bad loans in tranches to hedge funds, on a scale not seen before. That removes them from the pool of "bad loans". They are no longer counted. The owners are still not paying, but the hedge funds are just waiting for an opportune time to take advantage. A hedge fund is in business to make money. It's likely these loans are sold at a substantial discount.

"Qualifying For A Loan Modification"

"Candidates for a loan modification include anyone who finds themselves unable to keep up with their mortgage payments and facing a possible foreclosure."

(I had to remove the link for this is paste, but you can find it this with a quick search)

*****
Count the number of loan mods out there, and the number of properties with missed payments, and the number of loans sold to hedge funds, the current unaffordability of houses and whatever other devices they have used to disguise the true situation and you have a problem. Water always finds it's level. So does the market.

I am an early "trend line" kind of guy. Figuring this out after it happens is not impressive. ;-)

I am not saying it will be the size of the 2008 disaster, but it will for certain be the size of whatever the typical downturn has been for the last 125 years.

I'm buying accordingly. I expect prices to drop considerably over the next year or two, such as they have been in markets like Florida, Texas and Arizona.

Remember, an election was looming and it doesn't look good for an administration to have that much down turn in the economy. So, they (Biden/Harris) "cooked" the books.

There is a new guy in town, and as soon as they get to it, these problems will need to be dealt with.

By the way, A tsunami starts at one foot in height.

Ken M. · Answer

.Your comment: "seniors in particular, will not be able to afford the increasing HOAs and assessments, as insurance premiums are going through the roof"Is what concerns me the most at the moment. I saw somewhere that property taxes have gone up an average of 29% across the country as well. There is absolutely no justification for this. Municipalities say that money goes toward education and infrastructure, well both have gone downhill for 30 years with higher and higher taxes. There is no connection between the two anymore. It becomes a "slush fund" for the political class and until property taxation changes, homes are going to be lost as un-affordable by tax and by insurance.

Jay Hinrichs · Answer

Ken dont go down the self promotion lane again you will get your hand slapped again LOL.

4,612,000 (4.6 mil) HouseHolds Couldn't Pay Their Mortgage This Month -Concerned Yet?

Most Popular Reply