4.6 Million loans not being paid. Episode #365

Todd recaps a DSNews article that explains that 4.6 Million loans are not being paid and that 1 in 15 houses with loan in the US are not only not being paid but the foreclosure process has not ever started yet with these houses. Las Vegas has been hit hard by all the foreclosures, and leads the nation in delinquent mortgages as a percentage.

Hello. Welcome to Todd Miller TV. I was reading an article online on DSNews.com. For those of you who don’t know what DS News, it’s default servicing news. That’s the industry that’s built around the foreclosure industry.

Anyway so here’s the interesting number – 4.6 million mortgages are delinquent. So that’s quite a bit. So that means 4.6 million people that have mortgages for not paying.

This is the breakdown. First of all, it’s down from last year. Last year at this time if was 5.6. This is 4.6. So there are a million mortgages that have been resolved. They’ve either come back current. They got a loan mod or they got a principal reduction or they just got foreclosed on. One of those four things or they were paid off, right?

Those were all resolved. But of that 4.6, only 1.3 million of those were actually in the foreclosure pipeline meaning an NOD has been filed or it’s on its way to a notice of trustee sale. That’s not including foreclosed properties. These are only pre-foreclosures.

So that difference is 3.3 million. Now why that number is meaningful is because that’s one in 15 mortgages. One in 15 mortgages is delinquent and not in foreclosure. So this is why this number is so big and then I’m going to tell you why it’s important for you to know this.

The first reason is, is because it is no longer socially unacceptable to not pay your mortgage. People brag about it. I haven’t paid my mortgage in months. They haven’t foreclosed. It’s a source of pride, right? Because everyone else, it has happened to everybody else. It’s not a big deal anymore. So that whole psychology has caused people to just get in this mindset of just saying, hey, one of my is not paying the mortgage when 20 or 30 years ago, or even longer ago, that would have been an embarrassment to like stop paying your mortgage and have your house taken away.

OK. Why is this number important to you? Well, there has been this talk of the flood of properties that are going to hit the market and drive down prices but look what has happened in just a year. A million properties that were loans that were non-performing or that people were paying, that’s gone. It went from 56 to 46 and yeah, that’s a really high number depending on where you are in the country. It’s probably not a problem. In other places, it’s more of a problem.

But the banks are starting to work this out. The foreclosures are taking effect. That cleans out the problem. Short sales are happening. That cleans out the problem. Loan mods, that fixes the problem. So we’re kind of getting back to equilibrium.

For those of you who think that prices are going to collapse because the banks are like sitting on these properties and they’re just going to flood the market, it’s never going to happen. I call this like – probably two years ago when other people were saying there would be a tsunami, I called it – you could go back and check the video blog and look where I called it – it was over. The REO boom was over. You’re still going to hear REO and this is still going to happen but it’s not going to be like it was in ’07, ’08 and ’09. It’s not going to be anything like that.

So I thought I would share that. DSNews.com, that’s kind of my go-to place for stuff going on in the REO industry and if you go to the site, it’s pretty obvious that they’ve got all the information right there. So anyway, I saw that. I thought I would tell you guys about it so you would know the numbers and what they mean to you basically when you’re trying to make your decision buying or selling a house. Anyway that is my update for today and hope to see you on another video. Thanks.