Tag: covid-19

COVID and Real Estate, Foreclosure Moratorium, Pandemic Response, Real Estate

THE END OF THE FORECLOSURE MORATORIUM IS NEAR

Lupe Ruiz, REALTOR®/Broker

Back in 2020, homeowners whose income was affected by the pandemic were given the opportunity to apply for a forbearance on their mortgage payments. According to a report from the Joint Center for Housing Studies of Harvard University, Black Knight reported that 14% of all mortgage holders filed for a forbearance during the pandemic. By March 2021, 68% of them had already exited the program either by resolving the delinquency or paying off their loans. Eight percent were still working some sort of loss mitigation agreement and 4% were still in delinquency in the first quarter of 2021. They also reported that about 22% of mortgage holders still in forbearance by the time the 18 months are up, have 10% or less equity and more likely will not have enough equity to sell with equity. (jchs.harvard.edu)

Recently, it was announced that the foreclosure moratorium would end July 2021. So, what if you are one of those mortgage holders who is in forbearance and at risk of foreclosure?  What is next?

The Consumer Financial Protection Bureau (CFBP) has implemented protections for you that will take effect on August 31, 2021.

  • Servicers will need to give you time to process your options and consider your situation. They must meet certain steps before they can initiate a foreclosure.
  • Servicers can offer streamlined loan modifications, which cannot increase your payment.
  • Servicers will be required to increase their outreach to borrowers before they can initiate foreclosure.

What are your options:

  • Resume regular mortgage payment. You can ask to defer your missed payments by moving them to the end of the mortgage.
  • Lower monthly mortgage payment. Ask to modify your loan. This can be changing the interest rate, principal balance or the term of the loan.
  • Sell your home. If you find yourself not being able to make your mortgage payments and have enough equity, you may be able to sell with some profit. If you find you do not have enough equity, you may apply for a short sale. Foreclosure should be the last thing to consider if you do not have enough equity.

A servicer can initiate foreclosure if you:

  • Abandon the property;
  • Were more than 120 days behind in your mortgage before March 1, 2020;
  • Are more than 120 days behind on your mortgage payment and have not responded to specific required outreach for more than 90 days; or
  • Have evaluated all options other than foreclosure and there is no other options available. (consumerfinance.gov)

Feel free to contact me if you are currently in forbearance and need guidance on exiting the program, or believe you will need to sell your home. I am here to help. I’ll be happy to guide you through the process.

Real Estate

The Impact of Covid-19 on Homeowners Who are Working from Home

Lupe Ruiz, REALTOR®/Broker

Despite various employers offering telecommuting opportunities prior to the pandemic, the norm for the majority of the employees has always been to be at the office in person. When we had the shutdown last year, both employers and employees had to innovate and learn to adjust to remote work for employees.

They Adjusted to a New Way of Doing Business

Home offices were set in place, office equipment was used at home, and new ways of communicating face to face were implemented. Perhaps, at the beginning it was an inconvenience, but as time went by and social distancing became the norm, both businesses and employees began to see how telecommuting could benefit them.—Businesses would reduce overhead and employees would reduce commuting time.

The Pew Research Center conducted a survey which showed only 20% of employed adults were working from home prior to the pandemic. After the pandemic, it was 71% working from home. And, when asked who would prefer to work from home after the pandemic, 54% said yes.

(Image from Pew Research Center)

How Does it Impact Homeowners

There is no doubt many will remain working remotely whether it’s a couple of days a week or 100%.

Hanley Wood conducted a survey last year asking if employees would consider moving to a new home if they could work remotely, over 36% said yes. And, when asked if they lived in an expensive area if they would move if they could go all remote, 55% said yes.

Homeowners who own their home near their place of employment may now have an opportunity to relocate to the place they have always wanted to live. It may be saving money or simply a change in lifestyle, but relocating may now be possible regardless of where you work.

So, if you have been on the fence about selling your home and relocating, this is the time to do it. The market is hot for sellers. Not only would you be able to profit the most on the sale but you would also be able to negotiate staying in your home until you find your replacement home. Don’t think about it too much. You might miss a great opportunity to sell at the highest profit possible in history!

Real Estate

U.S. Vacation Rentals And COVID-19

Lupe Ruiz, REALTOR®/Broker

As we all know, the impact the pandemic has had in the travel and tourism industry has been one of the greatest.   According to the U.S. Travel Association, as of April 30, 2020, the national weekly travel spending went down from $19.8 billion on 3/7/20 to $2.3 billion on 4/25/20.  That is a difference of $17.5 billion!  The states hit the hardest were the ones with higher tourism and international travel.  For instance, their Total Weekly Travel Spending table reported that for this same time period, states like:

California went from $2,488 million to $298 million

Florida went from $1,883 million to $152 million

Hawaii went from $481 million to $18 million

Nevada went from $712 million to $97 million

New York went from $1,461 million to $170 million

Texas went from $1,423 million to $218 million

Consequently, vacation rentals have been impacted.  Travelers cancelled plans and although not all vacation rental owners have been flexible, most have worked with the consumer in providing refunds.  This means vacation rental owners have been severely affected.   On May 5, 2020, the CEO of Airbnb announced they would be letting go of nearly 1,900 employees, about 25% of their workforce.  The two reasons he stated for determining this were they do not know when travel will return and when it does return, it will look different; so they need to start taking action now.  For instance, as of April 29, 2020, Florida’s governor, issued an executive order extending the prohibition on vacation rentals due to concerns that infected people were going to the state.

This pandemic also affected major theme parks such as Disney. The parks had to close and they are a major tourist attraction in 50% of the six states mentioned above. According to The OCR, Disney theme parks face a $21 billion loss through 2022. According to ClickOrlando.com, as of May 5, 2020, Walt Disney Co. had not revealed when its U.S. theme parks will reopen. However, they are working on safety guidelines so they can gradually reopen the parks. This is probably why on May 11, 2020, they announced they were taking reservations for their Florida attractions in July.

So, in summary, the COVID-19 pandemic has drastically affected the travel and tourism industry, which consequently, has affected the short-term vacation rentals.  In my opinion, it will depend on how soon people start feeling safe to travel and the safety guidelines implemented in the major tourist attractions before we can see the vacation rentals coming back as closely as possible to normal pre-COVID-19.   And, when it does, it will be very different from what we’ve known.  Operators/Owners will need to be up-to-date with local health and safety guidelines and make appropriate modifications in the operations, cleaning and maintenance of the rental.  

It is possible that owners who have experienced a major loss and who are not able to maintain the property while the occupancy is low, might need to sell or pivot to a different type of rental (i.e. home insurance, coronavirus quarantine, corporate leases, etc.).

As always, reach out to me for your local real estate needs. You can schedule you 15-minute online session with questions on selling your investment property.

Real Estate

Selling Your Home Safely During COVID-19

Lupe Ruiz, REALTOR®/Broker

It is understandable for this time of uncertainty to cause homeowners to consider holding back on selling. However, if you are looking to sell, this should not be what holds you back. In fact, according to a survey from the National Association of Realtors, 77% of homeowners are preparing to sell their homes at the end of the stay-at-home orders.

Don’t stay behind and click below to schedule your 15-minute online session on your home’s value and how to safely sell your home during COVID-19.