How to Save and Find Distressed Homes

We will meet again in the main dining room at the Canyon Lake Country Club Bar & Grill Restaurant where we also host several large events. Please join us to share your thoughts, deal opportunities, or if you may need some assistance with a complex real estate or financial situation.

Since March 2020, mortgage loan servicing companies have granted 8.6 million loan forbearances (or mutually-agreed upon foreclosure delays, payment reductions, and/or payment deferrals) across the nation, according to Mortgage Shots.

Technically, many of these forbearance deals are forbearance and deferment hybrids where homeowners haven't made even one mortgage payment in several years. This is especially true for FHA and VA mortgages.

At some point, a high percentage of these distressed loans will go to foreclosure and be added to the national home listing inventory supply.

How to Save and Find Distressed Homes

* The monthly mortgage payment needed to purchase a median priced home for sale in the U.S. has almost doubled over the last five years (January 2020 - January 2025).

* State Farm, and many other insurance companies in California and elsewhere, is suddenly starting to request “emergency rate hikes” to cover their financial losses. The premium rate hike request from State Farm to California state officials is near +22% for homeowners insurance and up to as high as +38% for renter’s insurance. For my details, please ready my article: The Drying Disaster-Relief Insurance Pools

* Unpaid credit card debt reached an all-time record high of $1.21 trillion by the end of 2024. The percentage amount of U.S. credit card borrowers who are only paying the minimum payment continues to trend towards all-time record highs (10%+) in spite of the APRs (Annual Percentage Rates) also currently at all-time record highs.

* By the end of the fourth quarter in 2024, more than 11% of all FHA mortgages were delinquent nationwide. The maximum allowable debt-to-income (DTI) for FHA loans is a very flexible 57% DTI ratio. Upwards of 79% of FHA first-time home borrowers may have a month or less of cash reserves.

* Since October 2018 when the Covid-19 forbearances began to take effect for FHA, VA, and other types of loans, there've been millions of distressed homeowners who haven't had made a mortgage payment in several years.

* Did you know that the fastest-growing demographic percentage increase for people entering (not exiting) the U.S. workforce last year was over the age of 75, as per the Pew Research Center and Forbes?

* Did you also know that the average age of a home seller in the U.S. in 2024 was 63 years old? Are they selling because they want to or need to due to rising home expenses (utilities, insurance, mortgage payments, maintenance costs, etc.).

* The rising default rates on seller-financed mortgages or notes is something to keep a close eye on as well that can be purchased at discounts for higher yields whether it's a performing or non-performing note.

* We'll also share details about short sales, forbearances, deed-in-lieu of foreclosure transactions, note assignments or other types of paper flips, subject-to and recorded wraparounds, loan modifications, deferments, how to reinstate delinquent loans, how to qualify for cash-out loans with no income verification, and how to creatively sell a home or note for quick cash.

We hope to see you there!

Rick Tobin
[Realloans.com](www.realloans.com)