Thursday, March 4, 2021

Nashville is not one of the cities with a serious potential mortgage foreclosure problem.

By Rod Williams- Good news is no news so this is not news, but those in the banking, real-estate or housing counseling field can breath a sigh of relief for now.  Nashville is not on the verge of a serious housing crisis.

Here is the list of metropolitan areas most at risk of a foreclosure crisis. 













Here are the stats for the Nashville MSA:          64, 063       9,699       15.1         9.9%          13.2%  


I have had the fear that the Cova pandemic would lead to another housing crisis like that of 2006.  The loss of income and the moratorium on foreclosures, I feared, would lead to more people not paying their house payment. While the stimulus payments did not cover everyone's loss of income, for many it did.  And, people are being more responsible than I had expected.

While this data only covers FHA loans, those are the loans of more first-time homebuyers and people who had little down payment when they bought their home. If these loans are performing well, other loans are probably performing well also.

In 2006 there was an active subprime market that allowed many people to buy homes who should not have bought homes.  Credit standards were relaxed and all kinds of creative financing such as no down payment loans, graduated interest rates, and variable interest rates, and graduated payments, and loans that allowed negative equity to occur were common. Also, many of the people who bought homes with these risky type financing terms were what we would deservingly call high risk borrowers.  Not only was their income not stable, many had poor money management skills and had not learned delayed gratification or setting priorities or balancing a budget. Thankfully, those kind of loans are rare now and those high risk borrowers are not getting loans. 

There is enough bad news now; good news that it looks like we are not going to have a housing foreclosure crisis is welcome.  For those wanting more information and to see the data for the 168 largest metro areas, follow this link


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