Stock Market Crash

[dartsndeacs]

After having just gone through this process myself, it does appear that the congressional bill essentially is willing to pay the wages of everyone making under $100k for 2 months, as well as the businesses rent. The other part of the bill gives 4 months unemployment to the people. If the business was able to stay in business anyways and still pay their employees, this is just a straight transfer to the business owner. If not, at least it pays the wages of the employees and the landlords. The same amount of funds are going to the big corporations. Businesses might just be able to survive, especially if they do another round in another 2 months. I'm easing up on my continued crash projections, unless we're all stay at home for 18 months.

 

[Biff Tannen]

After having just gone through this process myself, it does appear that the congressional bill essentially is willing to pay the wages of everyone making under $100k for 2 months, as well as the businesses rent. The other part of the bill gives 4 months unemployment to the people. If the business was able to stay in business anyways and still pay their employees, this is just a straight transfer to the business owner. If not, at least it pays the wages of the employees and the landlords. The same amount of funds are going to the big corporations. Businesses might just be able to survive, especially if they do another round in another 2 months. I'm easing up on my continued crash projections, unless we're all stay at home for 18 months.

So what happens if the small business owner also owns the building through an LLC and pays himself rent that he uses to pay the LLC mortgage on the building ?

Who checks his rental rate to see if it's anywhere near market ?

Also, if a business owner doesn't bother to put the real estate into an LLC and lease it back, is he just screwed on receiving federal money for his rent ?

 

[saltydeac]

It really is kind of bizarre that when the price of gas goes down, rather than that being a good thing for everyone (cheaper to operate things), the economy takes a hit.

Because folks don’t realize how sizable the oil & gas industry is now in US. Lost jobs for thousands more than offsets benefit to all consumers from cheap gas. 2 BKs announced today from sizable energy cos. and unfortunately first of may indy energy cos. Russia and Saudi want to knock out a lot of our supply so they can take back market share and then slowly get price back up while maintaining their share. Plus deflation effect will drive down lots of asset values.

 

[RJKarl]

Because folks don’t realize how sizable the oil & gas industry is now in US. Lost jobs for thousands more than offsets benefit to all consumers from cheap gas. 2 BKs announced today from sizable energy cos. and unfortunately first of may indy energy cos. Russia and Saudi want to knock out a lot of our supply so they can take back market share and then slowly get price back up while maintaining their share. Plus deflation effect will drive down lots of asset values.

Nor do people realize new jobs in renewable energy companies have routinely be larger annually than the total number of jobs in the coal industry.

 

[saltydeac]

Nor do people realize new jobs in renewable energy companies have routinely be larger annually than the total number of jobs in the coal industry.

and unfortunately a lot of lost renewable energy jobs if oil stays in the 20s/30s.

 

[Biff Tannen]

 

[Biff Tannen]

 

[RJKarl]

and unfortunately a lot of lost renewable energy jobs if oil stays in the 20s/30s.

There used to be tons of blacksmiths and travel agents before there weren't. It's a good time to be transitioning away from fossil fuels.

 

[tigerswood]

Government is going to have to bail out the mortgage servicing industry big time. In barely over a week since the COVID forbearance program went live, we've already had roughly 2% of our servicing portfolio request assistance. That's a massive number, and the requests keep pouring in, obviously. We're a fairly large shop, and will receive tens of millions of dollars less than usual over the 4 (up to 12) months of these forbearance plans. It's an odd situation, because these are almost entirely Fannie, Freddie, and Ginnie loans, so we're basically going to short the government anyways. Our leadership team has already talked to the Feds ~20 times, so it sounds like something is coming soon.

My biggest concern is what happens after the forbearance plans expire. I really hope people understand (we try to be extremely clear) what a forbearance plan means. At the end of the 4 months, those payments all come due, and the homeowner either has to bring the loan current, or enter into another loss mitigation program. Normally, that would be a perfect time for a loan modification, but if the customer is still out of work and has no (or virtually no) income, they will not qualify, as there's nothing on which to base the new loan terms. 6 months or so from now, foreclosure proceedings are going to see a massive spike, unless the government extends those protections further.

 

[Liquid Karma]

Government is going to have to bail out the mortgage servicing industry big time. In barely over a week since the COVID forbearance program went live, we've already had roughly 2% of our servicing portfolio request assistance. That's a massive number, and the requests keep pouring in, obviously. We're a fairly large shop, and will receive tens of millions of dollars less than usual over the 4 (up to 12) months of these forbearance plans. It's an odd situation, because these are almost entirely Fannie, Freddie, and Ginnie loans, so we're basically going to short the government anyways. Our leadership team has already talked to the Feds ~20 times, so it sounds like something is coming soon.

My biggest concern is what happens after the forbearance plans expire. I really hope people understand (we try to be extremely clear) what a forbearance plan means. At the end of the 4 months, those payments all come due, and the homeowner either has to bring the loan current, or enter into another loss mitigation program. Normally, that would be a perfect time for a loan modification, but if the customer is still out of work and has no (or virtually no) income, they will not qualify, as there's nothing on which to base the new loan terms. 6 months or so from now, foreclosure proceedings are going to see a massive spike, unless the government extends those protections further.

Any bailout of the banks had better have waivers of loan mod qualifications tied to it.

 

[DeaconSig]

The solution, while not simple to implement, is to push all the months in which payments were delayed (the forbearance period) onto the end of the note. So if you have a 30 year mortgage and you have 10 years of payments left on the note, if you receive 4 months of forbearance, you now have 10 years and 4 months left on the note.

It is what is being done with commercial leases a good bit.

 

[Liquid Karma]

The solution, while not simple to implement, is to push all the months in which payments were delayed (the forbearance period) onto the end of the note. So if you have a 30 year mortgage and you have 10 years of payments left on the note, if you receive 4 months of forbearance, you now have 10 years and 4 months left on the note.

It is what is being done with commercial leases a good bit.

Same with car loans.

 

[JuiceCrewAllStar]

The solution, while not simple to implement, is to push all the months in which payments were delayed (the forbearance period) onto the end of the note. So if you have a 30 year mortgage and you have 10 years of payments left on the note, if you receive 4 months of forbearance, you now have 10 years and 4 months left on the note.

It is what is being done with commercial leases a good bit.

I don't see how this, at a minimum, is not the solution


the program as tigerswood describes is completely out of touch with the reality of the situation -- not to mention unethical -- and will result in so many defaults

no doubt some vulturous real estate lobbies are behind the formulation of the supporting legislation in classic disaster capitalism style

 

[BillBrasky]

I don't see how this, at a minimum, is not the solution


the program as tigerswood describes is completely out of touch with the reality of the situation -- not to mention unethical -- and will result in so many defaults

no doubt some vulturous real estate lobbies are behind the formulation of the supporting legislation in classic disaster capitalism style

And with this WH the lobbyists will get their way. Saving themselves money but ruining any chance at a larger recovery this summer/fall. One of the many reason why Brasky Portfolio Services is predicting short term economic death.

 

[JuiceCrewAllStar]

the slumlord in chief will make sure his cronies get theirs

fucking disgusting if this is how the program is really drawn up

 

[Louis Gossett Jr]

Yeah if its the way its described then whats the point. The reason you aren't paying it is because you cant afford it, so after a few months you somehow magically have a lump sum to pay back all the missed months.

 

[PhDeac]

Not sure how we can make shelter contingent on employment during a public health crisis that requires people to stay isolated.

I think a lot of people need to realize that even their ability to make a ton of money is contingent on the world not being in complete disarray.

 

[JuiceCrewAllStar]

 

[JuiceCrewAllStar]

Government is going to have to bail out the mortgage servicing industry big time. In barely over a week since the COVID forbearance program went live, we've already had roughly 2% of our servicing portfolio request assistance. That's a massive number, and the requests keep pouring in, obviously. We're a fairly large shop, and will receive tens of millions of dollars less than usual over the 4 (up to 12) months of these forbearance plans. It's an odd situation, because these are almost entirely Fannie, Freddie, and Ginnie loans, so we're basically going to short the government anyways. Our leadership team has already talked to the Feds ~20 times, so it sounds like something is coming soon.

My biggest concern is what happens after the forbearance plans expire. I really hope people understand (we try to be extremely clear) what a forbearance plan means. At the end of the 4 months, those payments all come due, and the homeowner either has to bring the loan current, or enter into another loss mitigation program. Normally, that would be a perfect time for a loan modification, but if the customer is still out of work and has no (or virtually no) income, they will not qualify, as there's nothing on which to base the new loan terms. 6 months or so from now, foreclosure proceedings are going to see a massive spike, unless the government extends those protections further.

what other mortgage/rental assistance programs, if any, did the $2 trillion relief package create?

serious question, links appreciated

 

[BillBrasky]