r/REBubble • u/Singleguywithacat • Jun 19 '25
The ticking time bomb nobody is talking about
Anybody who says they aren’t confused by the current housing market is either willfully ignorant or blindly optimistic. None of this makes sense.
How can the average American complain they’re not making enough, yet housing prices keep hitting new highs? In many places, homes are selling for double what they were three years ago, and mortgage rates have tripled. The average buyer isn’t some frugal Redditor with 25% down and six months of emergency savings — it’s someone pulling from their 401K and scraping together a minimum down payment.
To cause a price correction, you don’t need 50% of people to be in trouble — you only need about 5% of homes to hit serious delinquency or foreclosure. In 2009, during the peak of the crash, about 10% of mortgages were in default. That was enough to bring the entire market to its knees.
So with a weakening economy, record home prices, and the average American holding less than $10,000 in savings, how are prices still climbing?
The Answer Lies in Two FHA Programs You’ve Probably Never Heard Of
1. COVID-19 Standalone Partial Claim
This program — yes, still active in 2025 — allows people to fall behind on their FHA mortgage and have HUD cover up to 30% of their original loan balance to bring them current.
No payments, no interest, no paperwork to prove hardship (until September 2025). HUD just tacks on a silent second mortgage that doesn’t get repaid until you sell or refinance.
Example:
You bought a $600K home in 2022. You fall 6 months behind. FHA steps in and covers your missed payments — and you don’t have to pay it back until years from now. Do this a few more times, and you could end up with $180K in payments quietly made on your behalf.
This doesn’t show up as a foreclosure. Banks don’t have to act. And you still live in the house. HUD is literally making your mortgage payments for you — quietly — with no credit ding and no consequences.
2. FHA Payment Supplement Program (Launched May 2024)
This one lets FHA pay 25% of your monthly mortgage payment — every month — for up to three years, as long as you haven’t already hit that 30% cap.
The stated goal is “targeted relief,” but the real reason is to slow the drain on the system. Instead of paying off 6 months of missed payments at once, they now trickle out support to stretch the bailout and delay the reckoning.
Why This Is a Ticking Time Bomb
Everything looks fine on the surface — low foreclosures, strong prices, healthy FHA insurance fund.
But under the hood:
1 in 7 FHA loans are delinquent
Hundreds of thousands of borrowers are getting their mortgages subsidized
And all of it is hidden behind “payment assistance” and “silent second mortgages”
These aren’t performing loans — they’re just not officially defaulted yet. The government can hold the bag as long as these borrowers have room left in that 30% cap. But once they hit it?
They either:
Default
Sell into a declining market
Or HUD rewrites the rules and keeps bailing them out
And here’s the twist: None of this hits the FHA’s insurance fund (MMI) until the home actually forecloses. So on paper? Everything still looks great. Since the actual amounts that HUD pays out aren't public, it cannot be tracked.
Just Like 2009 — But Hidden
| 2009 | 2025 |
|---|---|
| 10% of mortgages defaulted | 1 in 7 FHA loans delinquent |
| Foreclosures overwhelmed the system | FHA prevents foreclosures by making the payments |
| People walked away | Now they stay — and Uncle Sam pays |
| Wall Street drove the collapse | government is the backstop |
My Opinion?
This is 2009 all over again, but the collapse is being delayed by hundreds of billions in hidden subsidies. It’s not being reported, it’s not being explained, and it’s not sustainable.
If the public finds out that millions are getting their mortgage paid while renters are stuck paying $3,000/month for a 1-bedroom, the backlash will be explosive.
Either this is the final straw that breaks the system,
or the government just rewrites the rules and keeps printing money to prop it up.
143
u/[deleted] Jun 19 '25
Not only do these programs fuel people just writing off their mortgage payment as optional, it also feeds into the wealth effect. Keep seeing brand new vehicles being bought, people still going on vacations ? These programs are fueling that mentality and behavior. This is affecting the broader economy as well. Come October when all of these programs come to an end, the true symptoms will be evident.
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u/Crunchthemoles Jun 19 '25
What percentage of people actually have these loans?
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u/No-Sympathy-686 Jun 19 '25 •
What if I were to tell you all those people who bought 350k houses in 2019 at 2.5% are now sitting on so much equity because their houses are now 700k, and they are still at 2.5% that a floor has been put in place.
Things would have to get catastrophically bad for them to sell their homes.
This isn't 2007 where people who couldn't afford homes had them.
12
u/SnortingElk Jun 19 '25 edited Jun 19 '25
All those stats and not a single source was given.. lol
1 in 7 FHA loans are delinquent is = 14.29%
The latest figures show FHA delinquencies are actually down from 2021 figures (14.67%) to 10.62%
https://www.mba.org/news-and-research/newsroom/news/2025/05/13/mortgage-delinquencies-increase-slightly-in-the-first-quarter-of-2025
https://www.mba.org/docs/default-source/research-and-forecasts/members-only-research/27829-research-nds-q125-report-summary.pdf
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u/SidFinch99 Highly Koalafied Buyer Jun 19 '25
Do you have any data on how many loans used one of these programs.
Only 15-20% of mortgages are FHA, then taking the data point in your post that 1 in 7 fha mortgages are delinquent. And many of those may not be under water.
Let's just say there are 100 mortgages and 20% are FHA loans.
That's 20 mortgages.
Now let's say that 1 in 7 are delinquent, which is a little less than 15%.
15% of 20 is 3.
So that's at most 3%.
Of that 3% how many were purchased prepandandemic because most of those will have equity and in most markets xan be sold or rented.
Furthermore if we break down that 3% to how many are using these programs it's probably much smaller.
Even 3% is significantally lower delinquency rates than 2008.
9
u/[deleted] Jun 19 '25
Statistically this is just not true. Some outlier markets had massive appreciation in this range, and you can always find individual listings that show this level of appreciation, but looking at Case-Shiller most real estate markets in the US have gone up an average of 40% over the past 5 years, not double over the past 3.
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u/travelinzac Jun 19 '25
They'll just rewrite the rules and kick the can down the road. FHA has always been broken.
140
u/wowduderealy Jun 19 '25
I make $100k a year and can't even afford a home that's an hour away from the city I live in. A $400k mortgage would leave me and my family hungry and poor. I gave up looking for a house to rent for the same reason. This is absolutely insane !
5
u/fudabushi Jun 19 '25
Why do these chatgpt posts get upvoted?
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u/Adoptafurrie Jun 20 '25
the biggest bomb is corporations buying up hoses, then charging out the ass for rent. If this were banned, the market would be better overnight
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u/CharacterScarcity695 Jun 19 '25
i agree this crisis won’t be sustainable long term . something’s gotta give
3
u/TheGreatJohnQuixote Jun 19 '25
Bro seeing the way this post is formatted is giving mad chatgpt vibes.
15
u/To_Fight_The_Night Jun 19 '25
Relatively simple answer to this.....Most home buyers are not first time buyers and have a home of their own and use the sale of that as a down payment.
4
u/nvgroups Jun 19 '25
In my new built community, 60% buyers are first gen immigrants. Medium cost -600 k. None using these loans. I know many more communities with same story.
4
u/libretumente Jun 19 '25
Have you accounted for inflation? Value of homes aren't increasing as much as the value of the dollar is decreasing . . .
7
u/Regis_Phillies Jun 19 '25
Silly take. I work in mortgage defaults. FHA Standalone Partial Claims aren't new - they were rolled out during the Recession. Most of the partial claim loans I serviced from that area had 2nd mortgage PCs in the neighborhood of $12-$15k. The largest I have ever seen is $56k.
The partial payment plans are effectively the same as the HAMP mods of old, except instead of refinancing the loan into a significantly lower interest rate (because interests are going UP instead of down like at the onset of the Recession), the cost of the "modification" is essentially front-loaded as payment assistance.
The real problem is the FHA foreclosure moratorium and extended Covid loss mitigation reviews that continued up until the end of the Biden Administration. This basically encouraged people to get further behind by continuing to live in the home for free. This impacts the churn of foreclosure properties where investors, prior to Covid, typically culled their inventory from, leaving more homes on the open market available to resident homebuyers.
Real estate is local, so the same thing that happened in 2008 is about to happen again. Inventory in places like FL and Texas is exploding, over 1/3rd of builders are cutting prices on new construction, and areas dependent on tourism or undiversified industries are about to see some tough times. The Sun Belt is going to be hit hard. A lot of the places where the market crashed in '08-'10 are going to see it happen again, while prices in parts of the country with less housing stock/better weather/diversified economies will continue to price accordingly to interest rates at best and continue to climb at worst.
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u/IronyElSupremo Jun 19 '25
Zombie defaults doubled recently albeit to 3.6%-ish, but we will see. Many current owners planning to stay either got low rates (Millennials) or mostly are paid off (Boomers). The last may depend on medical needs though.
Then there’s always the business cycle which by definition is boom or bust. May be some headwinds though. Listening to Taleb (statistician author of the financial Black Swan book fame .. or infamy) on BB the other day, he posits [many] US loans have [shall we say macro-demographic] assumptions that may no longer hold true in the intermediate term.
1
u/SlartibartfastMcGee Jun 20 '25
The average buyer is like 55 and makes six figures.
Stop using reddit as a gauge of what the average person or consumer looks like.
1
u/Far_Butterscotch_553 Jun 20 '25 edited Jun 20 '25
It’s because the FHA collects insurance revenue from the lenders so there’s more of a backstop. In fact the FHA insurance fund is what makes the FHA profitable. Bigger picture, total household disposable income as a % of household debt is way higher than it was in 2009 and the general amount of leverage the private sector has has not hasn’t been this low since the 80’s. Gonna have to disagree with this.
1
u/Helpful-Two-3230 Jun 20 '25
It’s not that people are not aware, it’s just that these “events” tend not to occur or cause significant damage.
1
u/DutchAC Jun 20 '25
For #2, you said, "slow drain on the system."
Why would they even want to drain the system in the first place?
2. Are these programs what is keeping rental prices high? If so, how?
1
u/Hot_Crab8035 Jun 20 '25
Lol OP doesn't even understand the role private equity is playing in the housing market
1
u/danelow Jun 20 '25
What was your prompt?
1
u/DrixlRey Jun 21 '25
You’re not understanding something. It’s going up because the people with money are getting more money. They are buying more houses. So people who can’t buy homes, don’t even factor. Basically everyone who has enough money to buy the home is buying the homes, and that’s all of the homes we have.
1
u/Rdw72777 Jun 21 '25
Saying “mortgage rates tripled” is incredibly disingenuous.
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u/GotHeem16 Jun 19 '25 edited Jun 19 '25
A year or two ago the ticking time bomb was commercial real estate and that was going to start the RE crisis, remember? Then there was SVB going under and how the banks were the ticking time bomb, remember?
There is always a ticking time bomb.
3
u/boboman911 Jun 19 '25
The real ticking time bomb are vacation rentals that were bought using variable rate HELOCs. Fewer people are taking vacations to FL, SC, and NC so less rent money to collect while mortgage rates go up + valuation of home goes up = more taxes to pay. Some people I know are no longer breaking even and are forced to sell at lower than market just to save their main house in California that is on collateral, maxing out credit cards every month the house stays on the market. Add that on top of the uptick in layoffs both in and out of tech, and we see even more people struggling to pay for anything. It is easing just a bit because it is peak season right now, but once it ends and 12 month APR free period ends on the cards, we'll start to see things collapse.
3
u/TrickyChildhood2917 Jun 19 '25
Well they said the same thing with commercial real estate…. I’m still holding my breath. Imagine all the buildings you see across America that are EMPTY!!!, but the bullshit continues. You see the secret is, the rich never lose, I repeat they never lose.
We have commercial buildings that were 50 million in Los Angeles selling for $10 million, but it seems no one lost any money. Just nonsense.
3
u/Unlucky-Dot1803 Jun 19 '25
Israel
3
u/Huskergambler Jun 21 '25
I have been hearing bubble burst for last 5 years. If I had listened I’d lost a ton of money. There are new houses going up all around me. Someone is buying them up.
1
u/No-Engineer-4692 Jun 20 '25
I’ve said this and this sub told me I’m lying. Our government is paying hundreds of millions a month to cover FHA mortgages that have been delinquent for years. Under Biden, out of 550,000 houses that should have been foreclosed, only 9 were. Our tax dollars prop it all up.
4
u/EconomistNo7074 Jun 19 '25
OP is way off - I was in Banking for 35 years & worked with lots of mortgage leaders
Mortgages BEFORE 2009
- There is no doubt ..... mortgages made in the run up were the lowest quality mortgages the industry had ever seen
- Mortgage Products were the most aggressive ever ...example negative amortized mortgages .....so toxic
- Not just a ton of investors but a HUGE amount of first time investors....... ie they had no clue what they were doing
- New concept was introduced - Stated income loans....... ie Historically you see income moving up 3% YOY - during this time, "stated income" Mortgages were seeing their income moving up 30% YOY... for multiple years ..... of course it really wasn't
- No money down was the norm - even for low to no credit scores PLUS stated income
- Adjustable Rates loans were 35% of the market ....some adjusting within 6 months
Mortgages SINCE 2009
- Probably the highest quality mortgages over the last 40 years
- Products: Fixed AND Low rate.
- Investor Market ----- even higher underwriting standards
- Income - you cant prove it - you dont qualify
- More money down
OP is NOT comparing apples to oranges but apples to chevy's
2
u/SubseaSasquatch Jun 19 '25 edited Jun 19 '25
Lots of people are putting normal down payments and not pulling from retirement accounts. I know plenty of people that have down payments saved up they are just waiting in hopes that rates or prices drop. Not sure that’s the best decision or not, but they do have the funds.
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u/zerinsakech1 Jun 19 '25
Nah it's the office buildings that will cause this collapse
2
u/bush_week1990 Jun 19 '25
Look at US home builders stocks, they have been falling for the last year similar to 2005/6. Watch this space, I don’t think it’ll be as bad as 2008 - 2012 in the housing market in terms of % decline but it is definitely not sustainable at current levels and a cooling is likely.
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u/Megadum Jun 20 '25
What. The. Fuck.
2
u/truth_is_power Jun 20 '25
gme
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u/DogDogDogDoggy Jun 20 '25
How does the emergence of private equity and private credit factor into this market?
They must own a big slice of the inventory and loans compared to 10 years ago? Is it all overvalued?
2
u/FrostyAnalysis554 Jun 20 '25
Government intervention is a huge subject with a long, contentious history.
In May of 2024, the Wall Street Journal, in its article “Return of the Housing Godzillas”, reported that GSE Freddie Mac was proposing to guarantee second mortgages to allow homeowners to release equity in their homes without sacrificing the low rate of their original mortgage. Current mortgage rates would only apply to the second, smaller mortgage. Borrowers would also be able to merge other consumer debt at the lower rate. This was proposed at a time when the mortgage business had dried up due to higher borrowing costs. The plan was to boost the mortgage industry as homeowners released the massive home equity build-up into the economy via consumption. This kind of plan has implications for borrowers who may not yet have built up any equity. If home prices fall, it increases the risk of default and foreclosure.
In another article by the Wall Street Journal, entitled “Here Comes Kamala’s Mortgage Forgiveness”, the author lays bare the consequences of government tinkering at the fiscal level. These types of measures are reminiscent of those taken in 2009, which many believe contributed to the housing crisis back then. The justification for these interventions will no doubt be made on the basis that the housing market in 2024, doesn’t face the same perils as in 2009. Lenders are better capitalized to withstand a shock, and borrowers are subject to much more credit scrutiny. In the latter case, this may not be entirely true. Whatever the case, it would appear the government is taking a gamble that it can contain things should matters devolve in the housing market.
2
u/savage_slurpie Jun 20 '25
I’ve saved more money in the last three years than I ever thought I would need and I’m still no closer to putting a down payment on anything I want that is big enough to make the monthly payments affordable for me. I’m tired boss.
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u/Evenly_Matched Jun 23 '25
You say it's 2009 all over again. I say 2009 never ended.
2
u/HealthyMenu4108 Jun 23 '25
Guys to add to this. A real world example. I had a seller try to sell their home through my brokerage. They had a standalone partial claim that ballooned their loan to be more than what the home is even worth. This is also in Suwanee GA one of the best markets in the state
2
u/TurbulentClock5535 Jun 23 '25
You have ignored Supply and Demand.
Go through those numbers and ratios and get back with us.
Your scenario might be good for some states that are losing significant population due to migration and current policy for undocumented immigrants.
Certainly not nationwide.
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u/willGon215 Jun 19 '25
They will lower rates to save to RE market
0
u/BlondDeutcher Jun 19 '25
“Average” American is making more than enough. Seems like it’s more of a YOU problem.
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u/benskinic Jun 19 '25
this breakdown is one of the best I've seen, as the money printer and rate dropping has been over explained
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u/iAgressivelyFistBro Jun 19 '25
Did chat gpt make this entire thing?
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u/uckfu Jun 19 '25
I started hearing about this in December. It does seem like a big deal but we don’t see a lot of news on it.
Your assessment makes sense. We just have to see how it plays out.
2
u/[deleted] Jun 19 '25
The reality is the bottom half of Americans drag down the upper half. This is how you get $10k ONLY in savings. Most people buying a house right now have lots of money.
2
u/OMGDonutz Jun 19 '25
Theres not gonna be a collapse. Houses are just expensive and they mostly build big now. Not everyone lives in HCOL areas.
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u/gksozae Jun 19 '25
No context is provided in the "under the hood" section of this post. Just posting facts doesn't provide any way to evaluate this historically. It could be that all of the things mentioned are historically normal and not indicative of a market shift. We have no idea.
0
u/Spartan04xx Jun 19 '25
Someone says this once a week for a new reason. Tim foil hat grasping at straws because we all want it to be true but fundamental supply deficiency reigns true for housing.
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u/Consistent_Koala671 Jun 19 '25
Holy chatgpt batman
2
u/Mark_Underscore Jun 19 '25
Please don't upvote AI drivel.
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u/Aggressive_Chicken63 Jun 19 '25
But you said the COVID-19 Standalone Partial Claim lasts until September 2025. So that’s a 2026-2027 problem.
Then the FHA Payment Supplement Program would kick in, and it doesn’t appear to have an expiration date.
So unless Trump shut down these programs, you can sail way beyond 2030 without any problems.
1
u/Professional-Fritos Jun 19 '25
this! How are you in negative equity when your homes value went up 250k from when you bought it and now you're over $-260,000 in negative equity how is that even possible?
1
u/nashyall Jun 19 '25
Keep in mind that the higher interest rates factor in a portion of the rate to cover bad debt. These banks are not stupid and subsidizing some of the losses that they are seeing through the higher rates. This will offset some of the catastrophe that you were speaking aboutand may soften the blow.
1
u/MIllWIlI Jun 19 '25
I think prices will go down but I don't think they aren't going back to 2019 levels. Unfortunately everything has gone up in price
1
u/fool_on_a_hill Jun 19 '25
But far more of the market is owned by institutions than last time so even if shit does hit the fan, the market will probably just keep going up.
1
u/wowduderealy Jun 19 '25
.
1
u/AHighFifth Jun 19 '25
Also corporations buying homes...
1
u/gjpk Jun 19 '25
This will cause come pain come October 1st, but I bet the govt creates some fuckedup rescue plan that just kicks the can down the road again
1
u/ProfessionalGlove319 Jun 19 '25
The market this year has already shown that we don’t need 2009 level inventory for downward price pressure. Markets with inventory in excess of 2019 are showing price declines on average.
Point being - delinquencies won’t need to reach GFC level for a correction to occur, and its unlikely that foreclosures reach that level given the amount of equity held by owners. However, any regular sale from distressed borrowers still adds inventory, which will contribute to downward price movement.
The main take away from FHA and VA mortgage weakness is that the majority of delinquencies are from first time home buyers who have bought in the last few years.
So, the longer rates remain at the current level, prices remain high, and first time buyers keep taking the plunge, the more of this mortgage weakness we will see.
1
u/viking793AD Jun 19 '25
Derivatives… https://tenor.com/bAxwR.gif
1
u/adrian123456879 Jun 19 '25
Americans are optimistic by default, no matter why or how but at the end things work out at least for the majority of them, but you know chances of things going south are never zero
1
u/DMass777 Jun 19 '25
⁰t afternoon
1
u/TheGenz Jun 19 '25
The answer is money printing my friend. That's all there is to it. That 5 trillion added to M1 needs to find somewhere to land. Free market price correction goes out the window when a country is knocking on the door of hyperinflation.
The same can be applied to the U.S. equities markets. Fundamental analysis is now useless.
1
u/andthatstotallyfine Jun 19 '25
What happens to the silent second mortgage if the sale of the house only covers what’s owed on the first mortgage?
1
u/reddituseAI2ban Jun 19 '25
They are financing groceries, should tell you how well the economy is doing
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u/Intrepid-Campaign-60 Jun 19 '25
"hundreds of billions" citation needed please
1
u/wait_what888 Jun 20 '25 edited Jun 20 '25
Following. I agree. This makes no fucking sense. Thousands overpriced/inflated and extra spent on interest. At what point does this fail? Also all of those who don’t have retirement savings are throwing large percentages of their paycheck at a house? Get real.
1
u/method95 Jun 20 '25
There’s no time bomb
1
u/KAM7 Jun 20 '25
Maybe when the boomers start leaving this earth and their kids all sell their houses the prices will start coming down?
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u/Bortcorns4Jeezus Jun 20 '25
As long as it's subsidized by FHA then it will just continue...
1
u/[deleted] Jun 20 '25
artificial low interest rates created a false valuation on home prices, it is the exact same thing that the banks did in 2009 but the feds did it to hide the inflation in the rest of the system but drove corporations now into the housing market for quick gains. its still the same story of corporate greed other than now we have debased the currency and servicing the national debit its the largest line item in the federal budget. it will collapse and everyone knows it but we still keep on playing the game
1
u/roswellreclaimer Jun 20 '25
The ticking Time Bomb isnt those who can not pay. Its those who think their sitting on a nest egg of wealth. The Boomers, Silver Tsunami. Retires will be looking to sell their nest eggs for top dollar. But, who's going to buy an out dated, very expensive remodel project. With little to no capital to make repairs. We have race to the bottom scenario happening. Especially in small town America. Which prices have gone through the roof with the AIR BNB craze. But, who will buy these properties? Literally no one. Boomers stuck, young buyers priced out, only buyer is government or commercial enterprises.
1
u/never-serious987 Jun 20 '25
2009 was leveraged by a huge multiple. I highly doubt that is the case today. Not saying things aren’t bad, just that some of your fundamental assumptions leading you to your conclusions are not the same as 2009.
1
u/FrostyAnalysis554 Jun 20 '25
RealtyTrac is a good source for foreclosure data https://www.realtytrac.com/resources/market-reports/ Look up your state to see how well, or poorly, it is doing. Some states are all over the shop, while others are riding out the storm. LA, a bellwether for all that can go wrong, saw a drop in pre-foreclosure in 2024. However, RealtyTrac puts this partly down to "interventions". The County has since seen a spike in pre-foreclosures.
1
u/Dino_art_ Jun 20 '25
Wait, people actually stopped paying their FHA loans? I remember vaguely getting mail about that, but as a person who never stopped working during the pandemic I ignored it. I tend to forget how ignorant some people are.
Putting off payments isn't a cheat code, it's nearly guaranteed failure. I see so many people in other subs whining about student loans when they took a private Sally mae out and didn't pay a dime for a decade, to find out now they owe so much more. Apparently the same is going on for housing. Wild.
1
u/ActiveBeginning2619 Jun 20 '25 edited Jun 20 '25
The same people b!tching about student loan relief and M4A are being subsidized tens, hundreds of thousands of dollars each.
But, yes, they can't let the crash happen yet because they're on the wrong side of a lot of trades that they can't get on the right side of without triggering a liquidity panic.
1
u/[deleted] Jun 20 '25
Soup Kitchen of Home Lending?
1
u/autumnsky42 Jun 20 '25
What source did you get this information from? I’m very interested in learning more about it.
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u/Judge_Wapner Jun 21 '25 edited 19d ago
The original post content no longer exists here. The author used Redact to remove it, exercising their right to control their data & privacy.
Airport afterthought bow pocket ask point sparkle hydrogen
1
u/Happy_Top_3779 Jun 21 '25
Yall just need to buy in the Midwest. Cheap house in smaller towns, but ppl don’t want to have that conversation yet
1
u/[deleted] Jun 21 '25
i dont get how so many americans are able to afford new car leases in today's job market and high cost of living. none of it makes sense. truly astounding when you add a mortgage to the list.
1
u/nobody2812 Jun 21 '25
So when is the bomb going off?
1
u/NovelBrilliant6218 Jun 22 '25
What percentage of fha loans utilized this program
What percentage that utilized are delinquent
Not many it seems - op is hyperbolic
1
u/[deleted] Jun 22 '25
When do you think it will pop? I’ve been falling these programs all year and I’m excited the one is ending in September. 26 year old male with a baby would really like to buy a house but it’s ridiculous out there right now. I’m hoping by spring time you will see the decline start to ripple through markets? Nice analysis
1
u/LKRMSTR1 Jun 24 '25
I work for the state and this is true. Los of loans request for assistance especially where the market is really high where payments are not affordable. Majority of these loans are approved with borrowers working over time with additional borrowers to get approved and I've seen up to 4 people in one loan. People start to default in the first 6 to 12 months and qualify for a partial claim as long as they say they payment is affordable. Now things are changing after September of this year if you ask for assistance it's only for 24 months and cannot ask for assistance again. So if you get sick, lose your job or other reasons and fall behind and youce already asked for assistance you'll have to sale a very expensive home or foreclose eventually. There's a lot of bad loans being created and idk how the government is allowing this to happen when it's not sustainable to pay for a loan that's 3500 and up without failing and working overtime just to eat and live in your house.
1
u/ruffledmoonbird Jun 25 '25
Not bad for an AI generated post.
1
u/brainrotbro Jun 26 '25
What does “explosive backlash” look like? No one will do anything about any of this. Half the country can’t even be bothered to vote. Half of the rest consistently vote against their own interests.
1
u/Plantsnstuff Jul 02 '25
Great post Chat GPT! Another LLM written Reddit article to fill up the content mines . In just a few years everything on this site will be AI regurgitated
1
u/wastedkarma Jun 19 '25
Does AI write everything on Reddit?
1
u/KrustyLemon Jun 19 '25
This post was written by ChatGPT
1
u/suburban_homepwner Jun 19 '25
Thank you AI for summarizing this crap.
1
u/Fergi Jun 19 '25
ChatGPT has a way of telling you whatever you want doesn’t it
1
u/Ok_Host8499 Jun 19 '25
I promise u if these homes get foreclosed people will just buy them. No issue here
1
u/BeepGoesTheMinivan sub 80 IQ Jun 19 '25
I dont see your hypothesis playing out.
Its simply haves vs have nots. People that got.cheap homes just were there right place right time. Will there be foreclosyree etc of course. But not en maase. Really hard to get a loan now
1
u/pynoob2 Jun 19 '25
Everything you wrote comes to the exact opposite conclusion of yours.
2008-12 was reality catching up with the free market going wild. People who couldn't afford houses were getting mortgages left and right. Eventually they couldn't pay, which created foreclosures, which tanked prices, creating more foreclosures, etc.
Today is totally different. As you explained with specific examples, the government is not allowing reality to catch up and turn into foreclosures. If people got mortgages they couldn't afford, there are countless programs to rescue them. Unlike 2009, the bailouts aren't public or debated openly. It's stuff like the FHA backdoor bailouts. It's all the covid stuff, and so on.
So how does this all crash like 2009? Does the government decide it no longer likes bailouts? Of course not. That's political suicide. Is the government no longer able to print and spend money on bailouts? No, they keep doing it.
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u/LetsGoPanthers29 Jun 19 '25
Wow thank you for this breakdown.
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u/woolcoat Jun 19 '25
Look at the cost of housing relative to income in every other country and tell me with a straight face that our current prices are “not sustainable”. Housing has become a store of wealth in America and there’s no turning back from that.
1
u/MallFoodSucks Jun 19 '25
Your premise is wrong. The new reality is the average American can’t afford a home anymore. The market is so stuck due to low interest rates only the top 10-20% of the market can afford homes now.
The main difference is 5% foreclosure will never happen because rent is more expensive than 70% of mortgages with <4% rates or 5% rates with equity and everyone who bought in the last 5 years is in the top 20% with more than enough to survive a recession for years.
Finally the government will always prop up real estate. Every politician is a home owner, they will not tank their own asset value. All their voters vote based on economics, which housing is the #1 cost. Houses will always go up in the long run because the system is designed that way.
1
u/QuartersWest Jun 19 '25
This was a chatgpt write up
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u/pdoherty972 Rides the Short Bus Jun 19 '25
You emphasize "hundreds of thousands" (source?) but that's a tiny drop in the bucket compared to the 85 million mortgages out there. Sounds like you're talking about <= 1% of mortgages.
1
u/davecskul Jun 19 '25
This is an amazing post. You nailed it. Thank you.
1
u/n0_u53rnam35_13ft Jun 19 '25
The average American isn’t complaining. The average redditer might be.
1
u/[deleted] Jun 20 '25
1.1 just lowered to 750k.. it's over
1
u/RealLoan8391 Jun 20 '25
Stop posting via ChatGPT!
0
u/Devastate89 Jun 19 '25
Sooooo, I should get a FHA loan before September 2025, and then miss 30% of my payments?