According to an estimate, almost 3.6 million Americans face eviction every year before the pandemic. But now after the pandemic, 28 million Americans are facing eviction. On the other side, the Federal government has also announced that the Foreclosure Moratorium, which was a temporary prohibition of mortgage payments, is going to end. If I look at all this from the viewpoint of people living in Beverly Hills and Los Angeles, I come to know that not only the homes but the flats of Beverly Hills are also affected by this decision. Only a Beverly Hills real estate agent can further guide you on it.
Everyone is aware that the Federal moratorium on mortgages for equal credit has reached its maximum limit, and homeowners have to reckon with thousands of dollars of overdue payments. I recommend you to take the help of a top realtor in Beverly Hills for detailed guidance.
I understand that there is a lot of uncertainty and people are stressed. They are eager to know if there are chances of extension of the Moratorium but nothing definitive can be said about it. However, staying in touch with the Beverly Hills Real Estate Agent can keep you on the safe side.
Let’s move on and see what will happen after the end of September’s eviction and foreclosure moratorium. Moreover, I will also guide you on how you can find the solution to your unique problems by getting in touch with a Beverly Hills real estate agent. `
The story started when president Biden announced on Tuesday the 31st of August 2021 about ending the Federal moratorium on mortgage foreclosures. However, he did not specify additional relief for homeowners who have fallen behind on mortgages because of the pandemic.
Let’s study it in detail.
Will homeowners lose money after the September eviction?
Many people want to know if the homeowners will have to lose money after the September eviction. Remember that industry officials say that homeowners already lose $1.75M of their homes. However, if we compare it with the current situation, I come to know that banks have little incentive to put delinquent homeowners into foreclosure at the moment.
On the other hand, housing prices have constantly been increasing for the past few years, and there are only a few homeowners who pay more on their mortgages than the overall value of their houses. In other words, I can say that the banks and mortgage service providers have the option to restructure the loan and track missed payments onto the back end of the mortgage. Even if someone wants to start foreclosure proceedings, they will have to wait for at least 120 days per federal law. A lot of time is also wasted in court proceedings.
Covid-19 has caused many financial crises, and there is a dire need to learn lessons from this economic downturn. The good news is that homeowners and banks are recovering quickly. It also includes the people who own flats in Beverly Hills.
However, the people on the lower end of the income bracket with little or no investment for savings are still facing trouble. Unfortunately, more than half of the US homeowners fall into this category.
At the bottom of the financial crisis, the boiler was an overheated housing market that was stoked by unscrupulous lending to unfit borrowers and then reselling those loans through obscure financial instruments called mortgage-backed securities. After which, these mortgage-backed securities wormed their way through the global financial system.
All this was not without consequences, and the global financial system observed the following changes.
- Interest rates start to increase.
- The overall home values started declining.
- Unfit borrowers were allowed to proceed with adjustable-rate mortgages.
- Some banks became holders of toxic assets.
Mortgage originators rely on the amphetamine of higher profits at this stage, and investors train the flames by beating their share prices. They had no genuine concern for the sustainability of the Enterprise. As a result, overall Beverly Hills home prices continued to increase, a considerable reduction was seen in the trend of building new homes, and the entire global banking system was gorging at the trough.
At this stage, homeowners and banks were expecting the solution to all these problems, which was provided by the new decision of Joe Biden to end the September eviction and the foreclosure moratorium.
According to the mortgage industry analytics firm Black Knight, some foreclosure proceedings will start in September, when the pandemic forbearance plans will end. Remember that 1.7 million homeowners are still in forbearance. However, this figure is decreasing continuously. The firm expects roughly 1 million homeowners to be seriously delinquent on their loans for 90 days or more.
Can homeowners expect relief after the September eviction and foreclosure moratorium?
It is one of the frequently asked questions. Let’s discuss more.
The White House has recently announced a series of measures aimed at preventing foreclosures. The Department of Housing and Urban Development has decided to provide homeowners with a 25% reduction in borrowers’ monthly principal and interest payments. Moreover, Federal agencies are also trying their hardest to give some kind of relief to borrowers to resume payments with the option of paying these payments at the end of the mortgage without any additional costs. Those making less than they did before the pandemic will be offered assistance to help them look for work and catch up on back taxes and insurance.
What will happen after the federal moratorium on mortgage foreclosures ends?
Although the federal moratorium on mortgage foreclosures has ended, land can still proceed with foreclosures, especially for those who have abandoned their properties or haven’t responded to outreach from the mortgage service providers.
The Consumer Financial Protection Bureau says that if you received forbearance under the Cares Act and you’re still experiencing financial hardship because of the pandemic, you may be entitled to ask for and receive an extension.
It is worth mentioning that you can only get an extension if you have not reached the maximum months of forbearance. In other words, I can say that if you are a borrower and began forbearance last spring, you will get your maximum at the 18th month. This is applicable to Flats of Beverly Hills & Beverly Hills Homes For Sale.
“A consumer who has not entered forbearance as of now can enter forbearance,” McArdle said. “Folks who have exited forbearance and then want to reenter, they can still reenter.”
But definitely, it is not going to happen on its own, and you’ll have to contact your mortgage service provider or real estate agent for detailed assistance.
Haven’t hired any realtors? Here is the solution.
What will be the impact of ending of foreclosure moratorium ending on real estate-owned properties
Before studying the impact of ending the foreclosure moratorium on REO, it is better to understand the concept of real estate and properties.
An REO property is the one whose ownership has reverted to the bank or the mortgage lender. If the borrower associated with a commercial or residential property defaults on the mortgage, the lender can pursue a foreclosure action to repossess the property. If the property fails to sell or if the lender is the highest bidder, the property is deemed real estate owned. The lender can then list it for sale.
How to buy real estate-owned property?
The biggest benefit of proceeding with the purchase of our listings is that they are priced at or below market value to entice the buyers to sell the Beverly Hills homes for sale. Here are some more options for you if you want to consider REO property.
First of all, you should get pre-approved for financing. Remember that lenders want REO properties off their books as soon as possible. so it is better to get pre-approved for a home loan before you start house hunting. In this way, you will get comprehensive knowledge about the budget and can confirm whether or not you are in a position to prepare and secure yourself financially.
How to find Reo properties?
Once you know the price range you’re working with, it’s time to browse REO listings. Here are a few ways to find them.
- Look for the Multiple Listing Service (MLS)which is a national database that connects real estate buyers, sellers, and brokers. You can search the MLS specifically for REOs.
- Check lender-specific listings. You can also go directly to a lender’s online listings to see what REO properties it currently holds.
- Ask a Beverly Hills Luxury real estate agent because we are mainly studying everything with respect to Beverly Hills and Los Angeles. A real estate agent should be able to point you toward REO listings in your neighborhood. Some real estate agents specialize in REO properties, which can help you find exactly what you’re looking for. It’s important to keep in mind that some agents do not prefer doing business with REO properties so ask the agent upfront about their experience in this area.
- Review national real estate websites. Free websites such as Zillow and Trulia allow you to search for REO properties in any city.
Hire a real estate agent
You need to take the help of a Beverly Hills real estate agent in order to buy an REO property in Beverly Hills. The agent does not buy the property for you but he will help you in saving your time by negotiating with banks on your behalf. Moreover, he will also have a fiduciary responsibility to advocate for your best interests.
Want to know the best part?
The seller typically pays the buyer’s agent so you do not need to spend money on hiring the one.
The pro tip?
While hiring a real estate agent, choose the one who has experience dealing with REO properties.
Make an offer to the lender
Once you have taken the services of a real estate agent and found the best property, it is time to make an offer to the lender. Remember that the real estate agent can also help you in determining what offer is likely to get accepted. Moreover, he can also submit the offer on your behalf.
It is mandatory to proceed with the powerful offer because if you attempt to lowball the bank, they will likely reject your offer and move on to the next prospective buyer who they are looking for luxury real estate experience. However, if your offer gets accepted you will be asked to sign a contract with the bank and transfer ownership. You might also be required to pay an earnest money deposit upfront, which is typically 1% to 2% of the purchase price and held in an escrow account until the sale goes through. Also, keep in mind that with REO properties, the seller will likely charge a penalty for every day closing is delayed past the deadline. Having inspections scheduled ASAP and securing your financing ahead of time can help avoid any delays.
Proceed with a detailed home inspection
A detailed home inspection is necessary while buying an REO property. Remember that such homes are sold in an as-is condition which means that you are responsible for any repairs needed. However, it does not mean that you will buy only the useless property, instead, there are strong chances that the property you are buying may be in pretty good shape.
It is also important to mention that foreclosed properties are often neglected or damaged by former owners. Thus, you must proceed with a professional home inspection to get a realistic idea of how much you need to spend to make the home more liveable after the purchase.
The detailed analysis and home inspection will give you an idea of whether you can afford the maintenance and repairs of the property or not. Sometimes the lenders also perform an inspection before the property becomes bank-owned. In such cases, it is better to review the report only and figure out if it can work. However, if the property has not been inspected and reviewed for a long time it is better to proceed with another inspection which will cost you anywhere between $300 to $500.
Perform thorough loan service providers’ outreach research on a property
Along with the home inspection, it is your responsibility to proceed with detailed research on the Beverly Hill property you are considering. There could be a lien against the home, which is another nasty surprise you want to avoid. For example, the previous owner may not have paid property taxes. In this case, if you buy an REO property, you will likely receive a quitclaim deed rather than a warranty deed. Your research will give you an idea if the lender is proceeding with transparency or simply transferring interest of the property and cannot guarantee the lingering judgments against the property.
Remember that detailed research will keep you on the safe side because you would become responsible for the consequences once you buy the property.
Are there any relief options In Beverly Hills for the homeowners?
Yes, there have been many mortgage relief incentives for homeowners throughout the years regarding homes for sale in Beverly Hills. Probably the best-known one is HARP, which helped countless borrowers keep their homes after the financial crisis. Today, homeowners can get temporary payment relief under Congress’s COVID stimulus programs. When most people think of a government or Congress mortgage relief, they’re thinking of HARP — the Home Affordable Refinance Program. HARP was a government program rolled out by the Federal Housing Finance Agency in 2009. For nine years, it helped millions of homeowners refinance after being hard hit by the housing crisis.
Luckily, you have options. Fannie Mae’s HIRO program and Freddie Mac’s Enhanced Relief Refinance are still actively helping homeowners refinance with little or no equity in their homes.
Here you might want to ask:
What is the benefit of utilizing the mortgage relief program?
The answer to this question is simple. The mortgage refinance relief program replaces your existing loan with the new loan and provides the homeowners with lower interest rate options making the payments more affordable.
Let’s dive deep and study some of the most helpful mortgage relief options available for homeowners in 2021.
HIRO: The high-LTV refinance option
Fannie Mae’s High-LTV Refinance Option (HIRO) allows homeowners to refinance with no equity or an underwater loan. However, only homeowners whose mortgages are currently owned by Fannie Mae can qualify.
There are various other conditions that you can use as a high LTV refinance option. For example,
- You are living in a single-family home and your loan-to-value ratio is above 97%.
- You applied for a loan after 1st October 2017.
- You have a complete record and data of the on-time mortgage payments and you can show the proof.
- You do not have any late payments in the last 6 months. However, if you have one late payment in the last year, you can still use the high LTV refinance option.
However, the above points are not enough to decide your eligibility for the HIRO refinance option. Instead, you should also have the Net Tangible Benefit which means that you must have some solid and logical reason for your refinance – whether it’s the lower monthly payment, a short or long-term loan, or a switch from an adjustable-rate mortgage to a safer fixed-rate mortgage.
FMERR: The Freddie Mac Enhanced Relief Refinance Option
FMERR — which stands for the Freddie Mac Enhanced Relief Refinance — is Freddie’s version of a high-LTV program. Originally set to expire in September of 2019, FMERR has been extended and is available to homeowners whose current mortgages are backed by Freddie Mac.
Let’s have a look at some of the major requirements that you should fulfill to qualify for the Enhanced Relief Refinance Option.
- The loan-to-value ratio must be higher than 97%. Remember that this condition is only for a single-family who is utilizing the Enhanced Relief Refinance Option for the primary residence.
- You initiated the loan origination process on or after November 1st, 2018.
- You have had the loan for at least 15 months.
- You have had no more late payments in the last 6 months and no more than once in the last year.
The FMERR program can be used for existing fixed-rate mortgages and adjustable-rate mortgages.
Mortgage Relief Options For Government-Backed Loans
Various Mortgage Relief Programs are available that are working successfully and are available for homeowners since 2009. They also include HARP, HAMP, FMERR, and HIRO which have only been available to homeowners with conventional mortgages backed by Fannie Mae or Freddie Mac
Mortgage relief options for government-backed loans are for those homeowners who have federally-backed FHA, VA, and USDA mortgages.
Such homeowners can also use Streamline refinance options.
Streamline Refinance Option
The Streamline Refinance is a special mortgage refinance program for people with government-backed loans. It’s similar to a mortgage relief refinance because you can use a Streamline Refinance Option even if your home is underwater or has very little equity. The interesting aspect is that Streamline Refinance has other benefits, too.
- You do not need to proceed with the re-verification of your income and employment and very little paperwork is required.
- All government-backed refinance options are convenient, so you can easily get these loans at low-interest rates and easy monthly payment plans.
Veteran Mortgage Relief Options
The department of veterans affairs may also help you in getting a VA loan which is another form of streamlined refinance loan. If you’re underwater on a VA loan and need relief to refinance, you may be able to use the VA Streamline Refinance (IRRRL) to do so.
Like other streamlined programs, the IRRRL requires no income or employment check, and skips the home appraisal — so your LTV won’t matter. Or if you’re not sure whether a refinance is right for you, you might take advantage of the other VA relief program.
How Will The Termination of September Eviction And Foreclosure Moratorium Affect Beverly Hills And Los Angeles?
Advocates are predicting a “tsunami” of homelessness. On one side, tenants are legally applying for rent relief programs while landlords and small-time investors who make their living by rental income were eagerly waiting for this decision.
Moreover, renters in Beverly Hills and Los Angeles do not have any right to challenge the eviction, especially if they are living on rent or their amounts are disputed. Many small and medium rental housing providers have exhausted personal savings to maintain essential building operations and pay for living expenses. Now they’re on the brink of foreclosure or forced sale and may permanently exit the housing industry. As a result, much of the affordable housing in Beverly Hills will be lost.
However, it is financially beneficial for the lawyers who handle foreclosures and evictions and were waiting for the cases for months.
Worried About Foreclosure Moratorium? Need The Help Of a Beverly Hills Realtor?
A real estate agent can provide you with the most expert advice on how to deal with the termination of the September eviction and foreclosure moratorium, especially if you are living in Beverly Hills.
Erik Brown is a Beverly Hills REALTOR & Luxury Home Specialist who can help you with any transaction and can go the extra mile in solving all of your problems related to mortgage payments and termination of the Foreclosure Moratorium. It’s a good idea to have a Beverly Hills realtor beside you, especially the one whose motto is to take care of and value the customers and solve all of their problems.
Remember that the real estate market does not care about your feelings but a good realtor like Erik Brown does!!
So Keep Calm and Trust Your Realtor, no matter how hard the circumstances may be!
Want to get in touch with him?
Living in Beverly Hills can be interesting even after the foreclosure moratorium if you consult with a top realtor in Beverly Hills. To know more about the real estate of Beverly Hills, follow me on Facebook, Twitter, Linkedin, and Instagram. Moreover, you can subscribe to my YouTube channel to know everything about real estate in Beverly Hills.
Then what are you waiting for?