EVERY mortgage created is bought and placed into a MBS, (Mortgage Backed Security) bond, or a CDO, (Collateralized Debt Obligation).. Every single one.
Right now everyone who bought into the moratorium concerning their mortgage and has not paid their mortgage for, say, 6, 9, 12 months, is actually in default.
ALL of those mortgages are in MBS bonds. Another word for them is called derivatives.
Now once the mortgage goes into default the note becomes junk.
Any MBS, or CDO will likewise become junk.
Now, WHO is exposed to these MBS's or CDO's?
First, BANKS. In fact banks are over leveraged with these derivatives.
Then we have pension funds, retirement funds, to name two. Think about WHO maintains pension and retirement funds. Damn near everyone.
Let that sink in.
I am calling it right now.
An impending MBS bond market crash is coming because of the government sanctioned moratorium. This will affect everyone.
Now, lastly, the government had no place to inject itself, as a third party, into a two party contract, and dictate any change to the contract.
When it initially happened I knew the government was setting up an epic fail situation, and any mortgage holder who went along with it, unwittingly, assisted in the coming crash. Right along with the mortgage industry.
An MBS bond market crash is coming. Bank on it. No pun intended.
All that nonsense is a distraction.
When the moratorium was announced I looked at my wife and asked her what could go wrong with this.
Won't impact us directly as we possess the titles and deeds to our properties.
Forbearance will turn into foreclosure at break neck speed, IMHO.
for•bear•ance fôr-bâr′əns► n. Tolerance and restraint in the face of provocation; patience. n. The act of giving a debtor more time to pay rather than immediately enforcing a debt that is due. n. The act or state of forbearing; the cessation or intermission of an act commenced,** or a refraining from beginning an act**.
What act? Foreclosure.
What happens if you've paid for your mortgage the whole time and didn't miss payments?
Absolutely nothing. You are good. Carry on!
Oh thats a small relief, thanks fren