In my opinion, this is one of the biggest news reports out there economically speaking. Wells Fargo and JPMorgan Chase have stopped accepting home equity credit line applications.
By the end of April, 7.6% of all mortgages will be in forbearance. That does not mean the mortgage payments are forgiven, it means the mortgagee will have more time to make that payment.
Most people can barely afford the bills they already have, not to mention paying back bills, without a job. This is like paying for things in collections. So no doubt, these mortgages will fail which means the homes will eventually be taken back by the bank and the so-called home owner kicked to the street.
Now factor in no one is buying.
These events have led Federal Loan giant Freddie Mac to record a 88% drop in income in the 1st quarter.
Since no one is buying homes, and over 7% of current mortgage holders cannot make a payment, and over 30 million Americans have become unemployed in the last six weeks…
What does that tell you?
Massive amounts of negative pressure have been placed on the housing market.
Now we can see why Wells Fargo and JPMorgan Chase have dropped the home equity credit lines.
Why give you a line of credit on your home, when many are going to default anyway. This way, the bank can save money by not lending it to you, and they get the house to boot.