Housing Crash 2: We Have Never Seen Mortgage Delinquencies Rise This Fast In U.S. History

If our economic numbers were going to improve substantially, now would be the time for it to happen.  The COVID-19 pandemic seems to have hit a plateau for the moment, the civil unrest in our major cities has been reduced to a dull roar, and millions of Americans that originally lost their jobs have now gone back to work.  If we are going to get some glimmers of hope for the economy, this is when we should see them, because the environment does not look promising once the summer ends.  Unfortunately, the numbers that we keep getting just continue to directly contradict the narrative that any sort of a “recovery” is taking place.  In fact, the Mortgage Bankers Association is reporting that the delinquency rate on residential mortgages shot up a whopping 386 basis points last quarter…

The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 8.22 percent of all loans outstanding at the end of the second quarter of 2020, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate increased 386 basis points from the first quarter of 2020 and was up 369 basis points from one year ago.

When I first saw that number, I could hardly believe it.

386 basis points in a single quarter?

I had never heard of such carnage before, and the Mortgage Bankers Association is telling us that this was “the biggest quarterly rise” in the history of their survey…

“The COVID-19 pandemic’s effects on some homeowners’ ability to make their mortgage payments could not be more apparent. The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA’s survey,” said Marina Walsh, MBA’s Vice President of Industry Analysis.

The delinquency rate on FHA loans is particularly troubling.

During the first quarter, the delinquency rate on FHA loans was 9.7 percent, but by the end of the second quarter that number had shot up to 15.7 percent

Fast forward to today, when the dam of pent up mortgage delinquencies cracked some more, with the Federal Housing Administration reporting that its mortgages which represent the affordable path to homeownership for many first-time buyers, minorities and low-income Americans, now have the highest delinquency rate in at least four decades.

The share of delinquent FHA loans rose to 15.7% in the second quarter, up a whopping 60% from about 9.7% in the previous three months and the highest level in records dating back to 1979, the Mortgage Bankers Association said Monday. The delinquency rate for conventional loans, by comparison, was 6.7%.

We have never seen anything like this before, and these numbers seem to indicate that we are heading for a crisis that will be even worse than the subprime mortgage meltdown that we witnessed during the last recession.

Of course the reason why there are so many delinquencies is because tens of millions of Americans have lost their jobs in 2020.

According to the MBA, mortgage delinquency rates are shooting up the fastest in the states where the job losses have been the most severe

Mortgage delinquencies track closely with the availability of jobs. The five states with the largest quarterly increases in delinquency rates were New Jersey, Nevada, New York, Florida, and Hawaii – all with a prevalence of leisure and hospitality jobs that were especially hard-hit by the COVID-19 pandemic.

The fastest way to fix this emerging crisis would be to get millions of newly unemployed Americans back to work as quickly as possible, and recently there has been some modest improvement in the employment numbers.

However, it is becoming very clear that millions upon millions of the jobs that have been lost during this pandemic are never coming back.  In fact, one recent survey found that almost half of all workers that have been laid off during this pandemic now consider their jobs losses to be permanent

In April, roughly 2 in 10 households experiencing job loss considered their layoff permanent, while the remaining majority believed they would return to their former jobs within a few months. Now, as states have stalled or reversed reopening plans and the coronavirus outbreak worsens, nearly half of unemployed workers believe their jobs are not coming back, according to a poll from The Associated Press-NORC Center for Public Affairs Research.

What this means is that millions upon millions of Americans will continue to miss mortgage payments, and a massive wave of foreclosures looms in the months ahead.

Needless to say, it won’t be a happy time for our nation.

Meanwhile, more businesses are going belly up with each passing day.

For example, we just learned that as many as 300 Pizza Hut locations are going “to permanently close”

Up to 300 Pizza Hut restaurants are slated to permanently close following the bankruptcy of one the chain’s largest franchisees.

NPC International, which filed for Chapter 11 in July, announced an agreement Monday with Pizza Hut’s owner Yum! Brands (YUM)to close roughly a quarter of its restaurants and sell the remaining locations. Specific restaurants and timing have not yet been determined, but NPC said a “substantial majority” of affected locations have dining rooms.

This is a great tragedy for those of us that love pizza, because out of all of the major pizza chains in the entire country nobody makes better pizza than Pizza Hut does.

And yes, I am being quite serious.

As soon as I could walk my parents began taking me to Pizza Hut, and I have been enjoying their pizza ever since.

Unfortunately, I don’t live anywhere near a Pizza Hut today, and so I don’t get to enjoy their pizza very often anymore.

In any event, a lot more companies are going to be waving the white flag in the months ahead.  Economic turmoil is one of the core pillars of “the perfect storm” that is now upon us, and after this current lull our economic problems are going to start accelerating once again.

Sadly, most Americans simply do not understand what is happening.

Most Americans still seem to think that everything is going to turn out just fine somehow.

What they don’t realize is that the whole system is starting to steadily unwind, and things are going to get really ugly as we continue down this road.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.com.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  By purchasing the book you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

A Shocking New Survey Finds That Most Americans Are Completely Unprepared For The Next Recession

Just like in 2008, most Americans are living right on the edge financially, and so any sort of an economic downturn is going to be extremely painful for tens of millions of American families.  When you have not built up a financial cushion, any sort of a setback can be absolutely disastrous.  During the last recession, millions of Americans suddenly lost their jobs, and because most of them were living paycheck to paycheck a lot of them suddenly couldn’t pay their mortgages.  In the end, millions of Americans lost their homes during the “subprime mortgage meltdown”, and today the housing bubble is even larger than it was back then.  Sadly, the reality of the matter is that many of us are just barely scraping by from month to month, and that is a very dangerous position to be in.

A new survey that was just released shows just how vulnerable American consumers have become at this point in time.  According to the survey, the top financial priority for 38 percent of all Americans is just trying to pay the bills, and for 19 percent of all Americans it is dealing with credit card debt.  The following comes from Fox Business

Among survey respondents in the nationally representative poll, 38 percent said their top financial priority is “just staying current on living expenses or getting caught up on all the bills.” Almost 3 in 10 respondents (29 percent) said their chief priority was “saving more money,” and 19 percent indicated they were mainly working on paying down debt from products like credit cards and student loans.

So that means that for nearly 60 percent of all Americans, the top financial priority each month is either finding a way to pay the bills or dealing with credit card debt.

And if you are struggling to pay the bills each month or you are drowning in credit card debt, the truth is that you are definitely not ready for the next recession.

The same survey also discovered that a very large percentage of Americans are not following any sort of a financial budget

More than a decade into the longest economic expansion on record, almost two-fifths of people said in a new Bankrate poll that their main financial priority was just keeping their heads above water on living expenses rather than saving money.

Nearly as many of those surveyed said that they’re not following financial budgets, according to Bankrate’s September Financial Security Poll.

So many people out there spend money whenever they feel like it and they don’t have any sort of a plan for their finances.

And then when they get deep into debt they wonder how that could have possibly happened.

It is so important to take charge of your money and to have a plan for where you want to go financially.  Because if you don’t have a plan for your money, I promise you that somebody else does.  As many of us have learned the hard way, it is all too easy to fall victim to all of the financial predators that are constantly circling these days.  The big financial institutions want to get Americans into as much debt as possible, because the deeper we are in debt the more money they make.

In our society, everything has become all about extracting as much money out of you as possible.  Even when we are at the checkout counter at the supermarket we are asked if we want to get some “cash back” so that they can charge us a “convenience fee” and make even more money.  And of course most of the money that is extracted out of us ultimately ends up at the very top of the financial pyramid, and as a result the gap between the “haves” and the “have nots” continues to grow.

In fact, the U.S. Census Bureau is telling us that the gap between the rich and the poor is now “greater than it has ever been”

In the midst of the longest economic expansion the United States has ever seen, with poverty and unemployment rates at historic lows, the separation between rich and poor from 2017 and 2018 was greater than it has ever been, federal data show.

To be fair, the U.S. Census Bureau has only been measuring this since 1967, and so it is entirely possible that things could have been even worse earlier in our history.

But the numbers do clearly show that the gap has been steadily widening for years, and at this point wealth inequality in the U.S. is far greater than it is in any country in Europe

The Gini index measures wealth distribution across a population, with zero representing total equality and 1 representing total inequality, where all wealth is concentrated in a single household. The indicator has been rising steadily during the past several decades. When the Census Bureau began studying income inequality more than 50 years ago, the Gini index was 0.397. In 2018, the Gini index rose to 0.485.

By comparison, no European country had a Gini index greater than 0.38 between 2017 and 2018.

So what this means is that we have a small group of people at the top of the pyramid doing really, really well, but meanwhile most of the rest of us are deeply struggling.

In fact, survey after survey has shown that the vast majority of Americans are currently living paycheck to paycheck.

The way that our entire system is structured greatly favors Wall Street, the big banks, the largest corporations and those with enormous amounts of money.  And they are able to maintain control of the system by literally buying elections and controlling public opinion through their control of the mainstream media.  Our founders were deeply suspicious of large concentrations of power, and we need to return to the values that our nation was founded upon if we ever hope to turn things around.

Unfortunately, more Americans that ever are convinced that socialism is the answer to the problems that I just discussed, and this is fueling the rise of politicians such as Bernie Sanders and Elizabeth Warren.

But socialist experiments have failed all throughout human history, and socialism would fail here too.

Big government is never the answer.  Sadly, we already have the biggest government in the history of the world, and many Americans seem absolutely determined to make it even bigger.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time. Of course the most important thing that we can share with people is the gospel of Jesus Christ, and if you would like to learn more about how you can become a Christian I would encourage you to read this article.

Basel III: How The Bank For International Settlements Is Going To Help Bring Down The Global Economy

The Bank For International Settlements - Photo by Yago VeithA new set of regulations that most people have never even heard of that was developed by an immensely powerful central banking organization that most people do not even know exists is going to have a dramatic effect on the global financial system over the next several years.  The new set of regulations is known as “Basel III”, and it was developed by the Bank for International Settlements.  The Bank for International Settlements has been called “the central bank for central banks”, and it is headquartered in Basel, Switzerland.  58 major central banks (including the Federal Reserve) belong to the Bank for International Settlements, and the decisions made in Basel often have more of an impact on the direction of the global economy than anything the president of the United States or the U.S. Congress are doing.  All you have to do is to look back at the last financial crisis to see an example of this.  Basel II and Basel 2.5 played a major role in precipitating the subprime mortgage meltdown.  Now a new set of regulations known as “Basel III” are being rolled out.  The implementation of these new regulations is beginning this year, and they will be completely phased in by 2019.  These new regulations dramatically increase capital requirements and significantly restrict the use of leverage.  Those certainly sound like good goals, the problem is that the entire global financial system is based on credit at this point, and these new regulations are going to substantially reduce the flow of credit.  The only way that the giant debt bubble that we are all living in can continue to persist is if it continues to expand.  By restricting the flow of credit, these new regulations threaten to burst the debt bubble and bring down the entire global economy.

Not that the current global financial system is sustainable by any means.  Anyone with half a brain can see that the global financial system is a pyramid scheme that is destined to collapse.  But Basel III may cause it to collapse faster than it might otherwise have.

So precisely what is Basel III?  The following is a definition from the official website of the Bank for International Settlements…

“Basel III” is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector. These measures aim to:

  • improve the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever the source
  • improve risk management and governance
  • strengthen banks’ transparency and disclosures.

All of that looks good at first glance.  But when you start looking into the details you start realizing what it is going to mean for the global financial system.  Banks are going to be required to have higher reserve ratios and use less leverage.  Banks are going to have to be more careful with their money, which is a good thing, but it is also going to mean that credit will not flow as freely.  Unfortunately, the only way for a debt bubble to survive is if it keeps expanding.  Anything that restricts the flow of easy money threatens to bring a debt bubble to an end.

These new regulations are going to be phased in between 2013 and 2019.  You can see a chart which shows the implementation schedule for the Basel III regulations right here.

So why is bringing the debt bubble to an end a bad thing?

Well, because it will cause the false prosperity that we have been enjoying to disappear, and that will be an exceedingly painful adjustment.

Sadly, most people have no idea what is happening.  Most people have never even heard of “Basel III” or “the Bank for International Settlements”.  Most people just assume that the people they voted into office know what they are doing and have everything under control.

Unfortunately, that is not the case at all.  The truth is that an unelected, unaccountable body of central bankers is making decisions which deeply affect us all, and there is not much that we can do about it.

This unelected, unaccountable body of central bankers played a major role in bringing about the last financial crisis.  The following is a brief excerpt from a recent article posted on Before It’s News

If you have any questions about the power of these Basel Banking Regulations you can also see the effects that Basel II and 2.5, mark to market accounting, had on the Housing Markets in the United States of America in 2008. There were many causes for that housing bubble, then housing crisis, but Basel II and 2.5 was most assuredly the pin that popped the housing bubble that led to the financial crisis of 2008-09.

But do most people know about this?

Of course not.  Most people want to blame the Republicans or the Democrats or Bush or Obama, and they have no idea about the financial strings that are being pulled at the highest levels.

It is so important that we get people educated about how the global financial system actually works.  The following is a summary of how the Bank for International Settlements works from one of my previous articles entitled “Who Controls The Money? An Unelected, Unaccountable Central Bank Of The World Secretly Does“…

An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe.  It is called the Bank for International Settlements, and it is the central bank of central banks.  It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City.  It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws.  Even Wikipedia admits that “it is not accountable to any single national government.”  The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system.  Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does.  Every two months, the central bankers of the world gather in Basel for another “Global Economy Meeting”.  During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on.  The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system.

Even though most people have never even heard of the BIS, the truth is that the global elite have had big plans for it for a very long time.  In another article I included a quote from a book that Georgetown University history professor Carroll Quigley wrote many years ago entitled “Tragedy & Hope”…

[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.

Today we have such a system, and most of the public does not even know that it exists.

And when the next great financial crisis strikes, there will probably be very little ever said about the Bank for International Settlements in the mainstream media.

But right now the BIS is helping set the stage for the great credit crunch that is coming.

Get prepared while you still can, because time is running out.