It seems the government have no concern for mom and pop investors. With the CDC extension of the eviction moratorium until June, it seems their only interest is protecting the banks. There are tenants refusing to pay rent and somehow this is okay. I wonder what would happen if we all decided to not pay our mortgage, I’m pretty sure a huge bank bailout would be in effect? What are your thoughts?

@Rafael Martinez

I love the thought.

@Rafael Martinez

My mortgages are from my local bank and aren’t sold on the market. Unfortunately, I’ll have to pass because I’d do more harm to my community.

Now my Wells Fargo and Chase loans are another story. But I’m refinancing out of those with my local bank.

Maybe a better solution would be take your money out of big banks and go with the local small bank? What do you think?

well lets see how far that gets you.

1. FICO score crushed for the foreseeable future.

2. stress on banking and investors who buy their loans.. maybe they just stop buying investor loans from small time landlord properties and you will see your values plummet with no liquidity in the market  just like 08 to 2010.

reality is there are work outs for landlords there is mortgage forbearance for those that actually need it etc.. keep in mind 80% of renters are paying rent.. and on BP at least if you read the super landlords on this site hardly any of them are not getting paid.. its not a big enough problem that is going to curry public favor.. you are in a small business you do this for profit and loss and for risk reward.. don't want the risks don't buy rentals.

@Jay Hinrichs

You bring some valid points, my argument is directed at how government makes legislation to benefit big banks. If prices do plummeted like it did in 08-10. Then history repeat itself, we saw how much bailout money was printed for the banks which turn into huge bonuses and stock buy back. Super landlord have the scale to insulate them for potential loss. Whereas small investors are being affected even more so than tenants and there is not enough aid for it. In addition, the cancel rent movement has been promoted by the media and politicians but it would be interesting to see the response if a cancel mortgage was the headline story.

Originally posted by @Jay Hinrichs :

well lets see how far that gets you.

1. FICO score crushed for the foreseeable future.

2. stress on banking and investors who buy their loans.. maybe they just stop buying investor loans from small time landlord properties and you will see your values plummet with no liquidity in the market  just like 08 to 2010.

reality is there are work outs for landlords there is mortgage forbearance for those that actually need it etc.. keep in mind 80% of renters are paying rent.. and on BP at least if you read the super landlords on this site hardly any of them are not getting paid.. its not a big enough problem that is going to curry public favor.. you are in a small business you do this for profit and loss and for risk reward.. don't want the risks don't buy rentals.

Yup. Things like this sound good in the abstract but in reality if any "cancel mortgages" movement ever could get any traction from landlords, in short order banks would simply refuse to make loans to landlords at all. Then there would probably be more supply on the market and more tenants would be able to buy former rentals as primary homes.

The real bottom line is that whether anyone likes it or not, there's a difference between tenant eviction and landlord foreclosure. With the former, the occupants are out in the street; with the latter, the landlord has lost their investment. Which one is going to curry more favor with voters and the public - people living in tents because they've been evicted or landlords having to go back to work and not retire early because they lost their investment?

Focusing only on the eviction moratorium and ignoring loan forbearance, resident/landlord rental assistance, added unemployment benefits, stimulus checks, EIDL, and PPP is confirmation bias.  Many of us mom and pops would have been pummeled otherwise.  The eviction moratorium appears to be a solution without a problem but it's not the only story.  We need to evict or seek rental assistance.

The eviction moratorium hurts the banks too.

Don't you love Real Estate investing. It's a very tough position to be in right now as an investor. If a tenant is not paying rent, it would be tough to get them to sign any documents for landlord assistance. 

Yeah, I kinda doubt many people are going to have a lot of empathy for landlords. Perhaps aim it at homeowners and landlords can get swept along with it.

Originally posted by @Rafael Martinez :

@Jay Hinrichs

You bring some valid points, my argument is directed at how government makes legislation to benefit big banks. If prices do plummeted like it did in 08-10. Then history repeat itself, we saw how much bailout money was printed for the banks which turn into huge bonuses and stock buy back. Super landlord have the scale to insulate them for potential loss. Whereas small investors are being affected even more so than tenants and there is not enough aid for it. In addition, the cancel rent movement has been promoted by the media and politicians but it would be interesting to see the response if a cancel mortgage was the headline story.

I get what your saying.  although in Oregon you can now get 80% of your rent from the state if you waive 20% of it permanently. 

@Jay Hinrichs are you saying you can get 80% of your rent from the state permanently if you decrease the rent by 20% permanently? or you need to stick to 80% permanently, and the state will only pay till tenants get their jobs back and they continue to pay you 20% below market? 

I am sure many of people rent out of their houses after they move else where, some properties were never bought to be as investment properties to start with. With these properties, I doubt whether there is a 20% margin.  

Originally posted by @Joanne Tsai :

@Jay Hinrichs are you saying you can get 80% of your rent from the state permanently if you decrease the rent by 20% permanently? or you need to stick to 80% permanently, and the state will only pay till tenants get their jobs back and they continue to pay you 20% below market? 

I am sure many of people rent out of their houses after they move else where, some properties were never bought to be as investment properties to start with. With these properties, I doubt whether there is a 20% margin.  

Only if your current tenant cant pay rent for Covid related reasons.. they will pay 80% of the rent for a period of time  Not forever.. however you must waive your right to the other 20% the tenant owes you.. at best might keep people from defaulting.  as we know max leverage and how investors set up the deals  20% is probably all the the profit .. but for long term landlords that have little to no debt not the end of the world

@Rafael Martinez they did have that. They called it forbearance and a ton of people who could make payments didn’t. The last bank bailouts were in fact precipitated by those who “cancelled” their mortgage by not making payments they agreed to whether that be foreclosure or strategic default.

Yeah............roll with that cancel mortgage movement. A smart(er) investor will be waiting to pounce on your property when your bank cancels you.

I think these moratoriums are a huge overreach and feel for the landlords that are being taken advantage of.  I feel it is the tenants who are going to pay in the future though as standards are going to be increased and landlords will be much less lenient on screening.  Whenever the restrictions are lifted there will be a lot of people evicted and many more that will finally realize the cash for keys deal is starting to make more sense.  The housing stock that will be open is going to come from landlords that just got burnt so they are likely to do their due diligence.  If there was any mortgage forgiveness though I see this as a bad thing because it would be the death of the small scale mom and pop landlord.  Banks will not be willing to lend and it will be even  harder to scale as you have to come up with the cash yourself to buy.  I think a much more reasonable solution is property tax forgiveness. If you can show you were affected by the action of the government your taxes should be forgiven, just to make them feel good the amount owed to you by the tenant can be decreased by that much as well, who cares we aren't seeing it anyway but it may make it more likely to pass.  

States say, "Tenants don't have to pay"...
Tenants say, "Damn the Landlord"...
Landlords say, "Damn the Note Investors"...
Note Investors say, "Damn the Banks (Mortgagees)"...

So who is the enemy here? Lets reflect on that. Sure, as a landlord who has a tenant who they cannot evict due to state restrictions, you'll be mad at the bank for requiring you to pay. But where is the root cause of this problem? It's squarely with the gov't - not with the bank, not with tenant.

Originally posted by @Alan Lacey :

@Rafael Martinez they did have that. They called it forbearance and a ton of people who could make payments didn’t. The last bank bailouts were in fact precipitated by those who “cancelled” their mortgage by not making payments they agreed to whether that be foreclosure or strategic default.  

Agreed! You don't need to start a movement or ruin your credit score. Just put all your payments in forbearance. All that is required is for you to attest that you are in a hardship. One of your tenant not paying rent is a hardship. What's even better is that most banks are allowing you to attach all the missed payments to the back of the loan. Just keep in mind that while you are in forebearance, you won't be able to get another mortgage or refinance. This is great relief for landlords!

There is also a lot of rental assistance going around in each's states website. You can apply as a landlord and receive the money directly in a lot of cases.

First thought: This government has no problem printing out a crap ton of money and throwing dollars away. So if we bankrupt the banks by not paying mortgage, they'll just get bailed out.

Second thought: There's this thing called foreclosure when you stop making payments. Banks will probably just foreclose.

Third thought: I will buy your houses in foreclosure

Yes ... some tenants will take ANY excuse to not pay. Others are truly in financial hardship.

My own thought is that the next needed step is a moratorium on loan payments, some kind of forced loan modification such that rental property loan payments missed due to tenants experiencing COVID issues would have the loan put into forbearance and the missed payments "added on to the end" with "balloon" "due dates" being adjusted as needed.

The mistake most of us make is that we expect the government to work out the details (everything that flashed through your mind reading the prior paragraph). We need to approach legislators, etc. with a developed plan to cover those concerns and contingencies. That is, instead of asking them, "Do it for us", show them "here's how to do it". That shows we're working toward a solution instead of just whining.

My $0.02 ...

@Rafael Martinez

It would be an incredible way to get the attention of big gov, big business etc... it would almost have to be 100% participation tho... I think about this all the time. We as consumers have the power to stop the flow of the dollar when and where we want to. But need an effort that is massively huge for it to impact correctly...

@Rafael Martinez don’t miss the forest for the trees my friend. This can’t go on forever, and with endless supply of money printing-when inflation hits or the dollar collapses you’ll still have a real tangible asset to convert into crypto or new dollars or gold or whatever means governments use for value transfer.

If you’re not saving your stimulus checks to keep as reserves for your primary and/or rentals I hope it’s for unsecured loans like credit card debts.

I don’t want to sound judgmental, because I’m not trying to be, but I am in survival mode right now-with the goal to have all my properties after the pandemic that I had when it started.

@Rafael Martinez no. Unfortunately we are the portion of society that follows the rules, pays our bills, allows tenants to not pay rent at our expense and continues to maintenance the property.

The consequences of the moratorium are serious and severe. The social degeneration that would be caused by good, honest, hard working, law abiding citizens, would be catastrophic.

Pay your bills, do you best to protect yourself and vote for candidates that represent your principles. That is the way of the civilized investor.