Category Archives: Foreclosure

The Vultures Are Circling the Housing Market

New Orleans      Following right behind the crisis that tenants are facing with the eviction situation clouded in different courts and interpretations and no stimulus in the offing, mortgage holders are in a similar mess as the pandemic depression lengthens.  REITs and private equity operators on Wall Street are raising mountains of cash once again to see if they can exploit the crisis as they did in the 2007-2008 Great Recession by flipping foreclosures from homeowners into rental property.

A common line in the farm crisis of the 1970s, when tens of thousands lost their land, was the problem of being “land rich and dirt poor,” where if your grandfather had paid off the land, you might survive, but if not, you were going under.  A headline in the Wall Street Journal on the vultures circling desperate home owners was reminiscent, speaking of the numbers of people who were “home rich and cash poor.”  The story noted a disturbing statistic,

Some 3.5 million home loans—a 7.01% share—were in forbearance as of Sept. 6, according to the Mortgage Bankers Association. Many more borrowers are behind on their payments but not in forbearance programs with their lenders.

The disaster profiteers are making single family homes their war zone whether outside of city center cores or in the suburbs, and they are rolling in money.  The big winners then are now among the nation’s largest landlords.

So far these companies have reported record occupancy, on-time rent collection on par with historical averages and rising rents. Shares of … Invitation Homes Inc. and American Homes 4 Rent, are up 79% and 59%, respectively, since stocks bottomed….

The vultures may not be as large outside of the suburbs, but they are as ravenous.  An article in Shelterforce referencing a recent report on all-cash purchases in New York City made this critical and disturbing observation,

Because COVID-19 has an outsized impact on lower-income Black and Latino families, it will intensify the disadvantage these families have in the face of cash purchasers who use their resources to pick up single-family homes, co-ops, and condos,” reads the report. It could also result in rising prices and fewer affordable homes available for sale overall, a potential increase in the number of distressed neighborhoods anchored by fewer local landlords or homeowners, and a growing concentration of housing in a small number of for-profit hands.

Shelterforce notes that some community developers in some cities are better situated to protect some of this housing as affordable and to modify some of the properties they acquire, but if the impact of this depression is anywhere near that of 2007-2008, it will be a drop in the ocean in most of the country.

Once again, we have to fear that without a huge federal and state response, this isn’t going to end well for millions of families.

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Stimulus Confusion Benefits and Blues

Little Rock      These are times like we have never seen before in the United States.  The government is actually giving almost all of us some money up to $1200.  If we’re among the eighteen million and rising “vast army of the unemployed,” we can get our check plus $600 per week for a time.  I know I’m not the only one who is confused, because I get questions hither and yon on a daily basis.  All of that is what we believe to be true, but, as always, the devil is in the details, so let’s look Satan in the eye, and see if we can get our feet on solid ground somewhere.

Let’s start with the one check to almost all.  First, if your income has been so low that you have not been filing, you need to get your paperwork into the IRS, so that they can transfer money to your account.  If you are on social security, railroad retirement, or other federal benefit programs, it will be automatic for you because your number and account information is already known.  If you have a question, the IRS has a site that might work for you called:  https://www.irs.gov/coronavirus/get-my-payment.  I can’t guarantee that it will work, but it might help if you’re not sure of your situation.

Much is made of the $1200 bump.  If you made less than $75,000 as a single filer, you get it all or $150,000 as a joint filer with a spouse.  You will still get something between $500 and $1200 if you made less than $100,000 or $200,000 filing jointly, as I read it.  If you have children under 17 years of age, you will get another $500.  If they are over 17, but you are still claiming them as exemptions, you get nada for them, and they don’t get anything for themselves either.

These payments do not count against your food stamp eligibility, but the expanded unemployment, the extra $600 per week will count against SNAP levels, although they will not affect Medicaid and CHIP program eligibility.  The $600 bump is good from April 4th until July 31st, about 16 weeks.  If you applied by then, but haven’t received the additional money, your money will be paid back to the application date.  Unemployment has been expanded to 39 weeks, as I read it which is basically throughout 2020, and you can hope a bump will be added, but that is not in any of the packages that have been passed to date.

If you have been self-employed, an independent contractor, a gig worker or in whatever situation where an employer was not paying into the state unemployment fund, in a real breakthrough you will qualify for unemployment benefits under the package.  Additionally, the headline on the applications that I have seen indicate that if you have been laid off or furloughed because of Covid-19, you will not be required to do a job search.  This is all new ground for the states, so there may be some early slips between the cup and the lip, but hang in there until you get paid.

I hope this helps cut through some of the info-fog about all of this.  We’ll keep at it!

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