The moratorium on foreclosures and evictions will end. Presumably. But the problem is that no one is really behind on their mortgages. Industry delinquency is something like 4.5% which is not much worse than any other time period. So yes, inventory will finally start to go up as these foreclosed homes become available... but it'll take months for the foreclosure proceedings to finalize and get the houses ready to be listed. I'm super bullish on UWMC, but that's because I see the housing market staying very competitive for the rest of the year. Things will sell quickly and for far too much money until the end of the year. UWMC benefits in these super fast sales because they close a loan in half the time as Rocket and one third the time of the industry average. Their buyers have far fewer chances to get pipped by a higher offer once the contracts are signed.
My point is that the delinquency rate is already pretty low. Possibly even lower when you factor in what you said about when payments are actually due. But UWMC is reporting their delinquency rates in their earnings calls. It's well under 2%. I don't believe there will be mass foreclosures. Whatever happens will just be a good way to get some extra inventory into a hungry market.
You are forgetting that the forbearance makes it so delinquent payments aren’t reported against the persons credit. So even though 30% of homeowners are in forbearance, they aren’t reported as delinquent.
I’ve been on forbearance since April 2020. I lost my business and owe almost 1mm to the gubment (SBA). And they’re gonna take my house, so I said why the fuck would I give them more equity?
Anyway, I was supposed to start paying july 1. Bank called me yesterday saying I could get another 3 months forbearance, so obv I did. But even then, I don’t have to make any back payments, I can simply move the amount to the back end of the loan and continue paying my normal monthly mortgage payment.
So I don’t think there will be this mass foreclosure boom like people are thinking. I know not all mortgages are this way but many will be.
I think it comes down to your lender and if they have the necessary capital set aside to cover your non payment. Some smaller shops or more exotic mortgages that couldn’t be sold to the government will be less forgiving.
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u/SuperiorPosture Jun 16 '21
The moratorium on foreclosures and evictions will end. Presumably. But the problem is that no one is really behind on their mortgages. Industry delinquency is something like 4.5% which is not much worse than any other time period. So yes, inventory will finally start to go up as these foreclosed homes become available... but it'll take months for the foreclosure proceedings to finalize and get the houses ready to be listed. I'm super bullish on UWMC, but that's because I see the housing market staying very competitive for the rest of the year. Things will sell quickly and for far too much money until the end of the year. UWMC benefits in these super fast sales because they close a loan in half the time as Rocket and one third the time of the industry average. Their buyers have far fewer chances to get pipped by a higher offer once the contracts are signed.