Will We Ever Be the Same Again?
Will We Ever Be the Same Again? According to Stout Risius LLC, which has tracked rent and eviction issues for months, up to 234,00 households in Missouri and more than 100,000 households in Kansas were at risk for eviction earlier this month. The moratorium on evictions ends on December 31.
A two-time cancer survivor talked about what it’s like to face eviction.
“When they show up to your door, to post that the eviction notice, you feel your heart drop to your stomach.”
Relief May Be Available
KSHB 41 Kansas City told us there might be relief available. Each tenant in both Jackson County, Missouri, and Johnson County, Kansas, can apply for up to $10,000 of rental assistance to get current.
CARES Act money for rent is also available for KCMO residents who live in Clay County through Northland Neighborhoods, Inc.
Will We Ever Be the Same Again?
That money will go directly to the landlords. “It would bring a lot of people current. It won’t help going forward, but at least for going backward, it will stop evictions that are in process,” said Kim Tucker of MAREI.
Tucker also said it’s not just tenants who are hurting, but landlords, too, who rely on rent money from their tenants to pay mortgages, taxes, insurance, and upkeep. “They’re pulling money out of their bank accounts to keep houses afloat. But eventually, they’re going to run out of money,” Tucker said.
“The government has mandated that we allow people to live in our properties for free, and we must take care of them, and that’s not sustainable.” A recent survey of property owners in the KC Regional Housing Alliance showed 30 percent of them were having problems paying their mortgages.
“And you better believe that if someone called on a cold day and said ‘Hey, my heat is not working,’ that we better find a way to get there and take care of it,” said Stacey Johnson-Cosby, chair of the KC Regional Housing Alliance.
The same survey found 40 percent of owners will sell their properties if the situation doesn’t change.
Then We Have the Homeowners Who Are in Forbearance:
The Housing Wire reports, “The U.S. forbearance rate, measuring the share of mortgages with suspended payments, increased for the second consecutive week from 5.48% to 5.54%, according to the Mortgage Bankers Association. The MBA estimates the number of homeowners in some form of mortgage forbearance increased from 2.7 million to 2.8 million this past week.
While the rate of forbearance increased across all loans and servicer types, for the first time in 25 weeks, the share of Fannie Mae and Freddie Mac loans in forbearance increased to 3.36% — a 1-basis-point gain. Ginnie Mae loans’ forbearance rate, which includes loans backed by the Federal Housing Administration, also gained ten basis points to 7.83%.
Will We Ever Be the Same Again?
We have shared here that this could be a big problem after December 31, when moratoria on foreclosure and evictions end. Now we have an added problem; the filing rate for divorce is sharply rising.
According to the NY Post, “Divorce rates have spiked in the US during the coronavirus pandemic as couples stuck at home for months “have had it.”
“The number of people looking for divorces was 34 percent higher from March through June” than 2019, based on new data collected by Legal Templates, a company that provides legal documents.”
The combination of stress, unemployment, financial strain, death of loved ones, illness, homeschooling children, mental illnesses, and more have put significant pressure on relationships.
The data showed that 31 percent of the couples admitted lockdown had caused irreparable damage to their relationships.
Now Is the Time to Get Ready
The combination of potential foreclosures and rising divorces will result in more houses sold and banks selling non-performing notes.
We know that divorce and foreclosure are two big reasons to sell for stressed homeowners. What is about to happen will be an opportunity for real estate investors to help homeowners avoid foreclosure and keep them in their homes.
If you are a note investor, do your initial due diligence. You want to perform a high-level review of the notes that will soon become available. You want to focus on only the best letters and underlying collateral.
Ask for FREE information about How to Sell Your House Fast.
Terra Firma Property Solutions, LLC, is a professional, full-service real estate solutions firm.
We buy and sell properties throughout the greater Kansas City area. We specialize in buying distressed homes, then renovating and reselling them to home buyers and landlords. Terra Firma Property Solutions: excited to be part of the economic rejuvenation of Kansas City and its surrounding areas.
Call us today at (816) 866.0566
