I've been effectively unemployed for Over a year I've had to resort to taking My Social Security he's reached the Conclusion that being foreclosed upon is His best option rather than live month To month worrying about my Survival I have decided that the better Course is to walk away from this home Leading data providers on foreclosure And mortgage delinquencies like Black Knight and atom are stating that right Around 2 million households are behind On their mortgage AG however when we dig Deeper and when we look at the survey From HUD and we bring out a calculator Because HUD does not calculate this for Us we find that over 4.5 million people Are behind on their mortgage right now And then when we add households that are Renting that are also behind we have a Total of over 10 million households Around the nation that are behind on Their mortgage and think of the biggest Stadium in the US the biggest stadium in The US can hold 107,000 people so imagine that Stadium At maximum capacity and filled 90 times That is how many people right now Minimum that are in financial distress Some of you have already heard this Story but back in 2009 I lost my house I Had a foreclosure now during that time It was very interesting because that was Also the birth of the hyper loan
Modification process now obviously the Loan modification process was necessary Because number one the government bailed Out the banks so they owed us our houses They owed it to America not to foreclose On our houses so I want you guys to Remember that but the loan modifications Were also necessary because all of the Exotic financing that happened back During that time plus the other thing Overwhelming unemployment now as far as The Exotic loans there were things like Stated income uh need which is no income No asset cisa which is stated income Stated asset which is basically where You can lie and just State your income To A lender to qualify for that loan There was also crazy things like Negative amortization payment option Loans that allowed people to make a Payment that didn't even cover the Interest on their loan so a lot of that Has changed but come to find out a lot Of these Banks were never adhering to The new laws to prevent foreclosure in The first place and so today we're going To over all of those stats and we're Also going to take a look at data that's Going to go deeply into the health of The consumer which remember is the Economic engine mom and pop are the Economic engine and I'm going to show You guys that Mom and Pop really aren't In that good a shape but before I do
That all right we're going to go Flashback in time and I want you guys to Listen to George Bush talk about the Financial crisis and how important it is For people to start coming together I Wanted to play this because of the Debate last night what I'm interested in Is as a country can we even come Together to fix the existing problem and You may not think that there's a problem But for sure there's a problem for a Minimum of 10 million listen to this Videoy is facing a moment of great Challenge but we've overcome tough Challenges before and we will overcome This one I know that Americans sometimes Get discouraged by the tone in Washington and the seemingly endless Partisan Struggles yet history is shown that in Times of real trial elected officials Rise to the occasion and together we Will show the world once again what kind Of country America is a nation that Tackles problems headon where leaders Come together to meet great tests and Where people of every background can Work hard develop their talents and Realize their dreams what if that dream Was really home ownership more Specifically what if that dream was Affordable home ownership well certainly Fast forward to today and that's Out Of Reach for I got to guess 80 million or
More Americans so we can't even get After our dreams but regardless let's Jump into the most recent HUD survey Data on what's really going on Underneath the hood in American Households because we know we can't find That in Black Knight we can't find that In atom we can only find that by asking Americans This is August 2024 housing Market indicator monthly update from HUD HUD didn't do the calculations for me I Had to calculate how many people were Actually behind on their mortgage now The way I did and on their rent now the Way I did that is I went to the end of The report and this is what I found as You guys can see as far as behind on Rental payments they're using Approximately 45.9 million us rental households now on The bottom there you can see behind on Mortgage payments the data weighed by Number of households is at 82 05 million Delinquency rate times the total amount Of households we're going to look at Both mortgages and we're going to look At rent now starting at rent you guys Can see I highlighted that right there And the amount of households right now That are behind on rent and I want you Guys to really think about this okay 12.3% 12.3% of households are behind on The rent that is incredible to me guys It's so hard for me to Fathom because
We're coming out of again massive Stimulus how again and I it's a Rhetorical question but how is everyone Broke again so soon well it's because The rich and it's because the elites and It's because the FED regardless the Total number of households is over 5.6 Million 5.6 million households that are Renting are living with anxiety and Those are the people that are just Behind people that are still making Their payments I can only imagine how Many of those people have anxiety now When we go down on this chart real quick Quick and we look at how many people are Behind on the mortgage look at to the Right 5.53% that is a huge jump from what Black Knight and atom is saying with a Delinquency rate of under 3 and a half% So it goes from 3 and a half% you guys From the leaded dating providers but When we survey households you see here It's way more at 5.5% and then when we take that 5.5% Again and multiply that into the 82.5 Million that gets us to 4.5 million households that are Currently behind on their mortgage now When we add both of those together we Get a total of 10, 28,000 households and I'm going to tell You guys those people their purchasing Power is gone and it's probably gone for
Several several years in the not so Distant future what I think is going to Happen is is they're going to print more Money and they're going to say they're Going to do it to help us the homeowners And remember you guys again when I lost My house I was gone in two weeks they Bailed out the banks $700 billion some Of these CEOs got billions of dollars They took billions of dollars in Taxpayer money and one person put that In their pocket that happened all of the Time back then so when the baell out Come I want you guys to remember it is Bad it is very very bad the transparency And lack of Integrity is insane and Generally all that happens is is when They do the bailout they just save the Banks they get rich and we we still lose Our house I want to bring up a point I've been saying this a lot I believe That Fanny May and Freddy Mack are the Long arm of the FED I believe Fanny May And Freddy Mack allow the FED to Strongly it's not even a question of it They greatly manipulate the mortgage Market and so here's the thing I'm going To play two videos and I want you guys To remember who Freddy Mack and Fanny May really are they're a bunch of thugs Listen to this and Freddy now boasts Nearly 150 lobbyists spending almost $175 million combined over the last Decade alone more than pharmaceutical
Giant fizer and defense contractor Boeing the mortgage Giants doled out $2 Million more over the last four years to Political action committees money used As a weapon to fend off regulation that Would have required them to maintain Deeper Financial reserves to act as a Cushion to the kind of risky loans that Led to their undoing Fanny and Freddy Were thuggish that people Who worked there misled other people They used political power in an ugly way A few years ago Fanny was F nearly $400 Million after an investigation revealed It overstated earnings by10 billion to Maximize executive pay does that sound Familiar the first thing I thought of When I heard that video is the National Association of Realtors and then the Other thing I thought is is how does a Company misquote 10 B billion dollars in Revenue I mean talk about a bunch of Liars and that's who you and I bailed Out you and I bailed out a bunch of Liars and instead of them improving that Situation all they did is kept it the Same and we know that because I've Personally reviewed from 2018 cfpb Reports the Consumer Financial Protection Bureau reports that state 16% Of mortgages that were originated in 2018 were in violation of qualified Mortgage guidelines meaning that 16% of People that closed in 2018 when houses
Were way lower way more affordable 16% Of those people obtained financing Violating safety protocol and instead of Fines and penalties and warnings they Just changed the guidelines to protect The banks so the fed's job the Treasury's job remember it's to protect The banks and when we go back in time And we ask again why do they do this Listen to what the TR treasury said cost Several hundred billion Doar uh Harry these companies are so big And so interwoven into the financial Markets and our financial system we we Had no choice this uh a failure by Either one of these companies would Cause a great havoc in the economic System it would be a big blow to the Average American they had no choice well I beg to differ and I'll tell you it Hurt me I had to go through nine years Of pain but I rebounded I improved my Life I learned some pretty tough lessons And it was incredibly painful but I am a Stronger person for doing it and that's The reality of what needs to happen the More that they continue to bail people Out and Banks out the more pressure it's Going to put on us As Americans and the More and more people will be trapped not In foreclosure but loan modification and Don't forget during covid there was Millions and millions of people that Have already filed loan modification
Regardless what I want to do now is go Under the hood and let's take a look at The health of the consumer because Without the consumer and without the Reckless spending everything falls apart So we have to ask ourselves why why is The trajectory of foreclosure going up Why is the distress on consumers getting Worse now the first thing is is I want To talk to you guys about the price Because remember the price is more Important than payment payment's Important I didn't say it wasn't but Price is more important and so right now There's nowhere else to go with prices The prices of houses are literally maxed Out income there's literally no Mathematical way for income to keep up With prices and when I pull up this Chart right here the price to median Household income again and my point in Telling you guys is these house prices Are maxed out and in fact when we look At this it's kind of like we're Potentially in a triple bubble but the First thing is is I want to go all the Way to the right of this chart and I Want you guys to look at that 7.74 that means that it's going to take You 7.74 years of your gross income not After taxes so it's probably more like 10 years but your gross income 7.74 Years of that to pay off your house now Look at to the left all the way to the
Left you see that downward Arrow I have The reason I have that is the last time We were at this level prior to the GFC Was in the 50s and going into the 60s so We had that elevated payment but Remember income's important so look at How long the house price to median Income ratio went down it dropped for Over 10 years until it reached about Four times under four times now that got Out of control again as you can see Where that Arrow says housing bubble got Out of control right there and then House prices collapsed and that went Down now that first X right there you See that's when QE operation twist was Initiated which completely wrecked us we Should have slowly rebuilt the housing Market together with responsible Consumers but instead of doing that they They injected liquidity into Banks and Risky financing was born again now from The first x to the second X I kind of Like to make a point like that was the Start of a first bubble right there and They were doing quantitative tightening They increased the federal funds rate But instead of the bubble getting Smaller it went parabolic during Lockdowns you see that with the 3DX but The crazy thing is is after it started Going down it shot back up so it's Possible and I want to ask you guys this We may actually be instead of a double
Bubble we may be in a triple bubble in Other words at best people's houses Right now are just going to be flat and If house values are flat most people They can't refinance and they can't sell Because remember you guys remember what Happens fees we have so many middlemen That are taking our money in the form of Fees let's move on to payment because a Lot of people only want to talk about Payment and again I know it's important But the price is more important but Regardless here's what the national Payment to income ratio looks like and I First want to let you guys know that This is gross income counting a 20% down Payment and what you guys are looking at Right here is not including taxes Insurance or HOA or maintenance in other Words this is way worse than what this Is letting us believe but right now We're sitting at 34.3% of income going Towards paying a mortgage payment that Is higher than the GFC we're in a worse Situation than a than the GFC from a Price and a payment standpoint and an Income standpoint income is in the Absolute garbage now I went back to the Mid to late 1980 because that's the last Time we had over 34% of household income Going to a mortgage but look at the Trajectory that trajectory was down Going into the 1990s the late 1990s Right now the trajectory is going up in
Other words we're right in the middle of A financial crisis and storm it's called Inflation in quantitative tightening I Mean the whipsaw effect that is going on Right now from the Federal Reserve isn't American and it isn't fair at least That's in my opinion but again we have Issues with price and payment let's keep Going and ask what that's doing to Consumers the first thing we know is This consumer credit card debt is over 1.2 trillion and now we also know that People can no longer afford to make Their credit card payments as seen in This chart right here the delinquency Rate on all credit cards is 3.25% and that trajectory y'all is going Up the last time we had a three and a Quarter delinquency rate on all consumer Credit cards was Q4 of 2023 and I really Want to really remind you guys that when It was like that it was going down which Means the economy was doing better and Consumers were getting stronger right Now it's going up so again it was going Down the last time we were at three and A quarter and now it's going up the last Time we had this trajectory of consumer Defaults on credit cards and delinquency Was the GFC it's all starting to make Sense now right consumers are not doing Well right now we know that is there More room for pain yeah people can Handle a lot of pain but my point in
Telling you this is you got to be really Careful On what you think is going to happen Next is not just people not paying their Credit cards the problem is also as a Result of inflation apathy and Reckless Consumer spending habits people aren't Saving any money anymore take a look at The savings rate right now the savings Rate personal savings rate is only 2.9% And I want to remind you guys according To the fed the lockdown savings or Excess savings is gone so again as a Result of inflation and being crushed For decades of bailing out Decades of EXP expenses we can't even save our Money anymore 2.9% savings rate is awful If people can't save their money they're Not going to spend it they're going to Choose food over a watch and I have news For you guys income actually updated Yesterday perfect timing right updated Yesterday and for the first time in four Years and I'm looking at real income Okay for the first time in four years we Actually had an increase but the thing Is guys is it only took us back to 2019 too little too late because one Thing we don't have are the prices of 2019 all we have is the income take a Look at this chart right here so the new Updated income for all of 2023 as far as Median household went up look at that Isn't that awesome to
8,610 again not enough as shown in the Previous data we wouldn't have the Trajectory of credit cards going up and We wouldn't have the savings rate Absolutely plunging if people were Making enough money to afford to live But the thing is again wages have not Kept up with the FED greed corruption And that's evident in the data so when I Tell you guys it's consumers that are in Control really of the economy and really What's happening is people are keeping Us divided the elites the politicians so That they continue to remain in control Telling you guys look under the hood and I know it's hard because they're Manipulating the data and the data Inputs themselves are cooked they are Cooking their books but if you don't Believe me again go to the store ask People around the store hey are you one Of the people that's late are you Struggling to buy groceries because the Answer is almost always going to be yes I can tell you what the solution is Because remember I lost my house so I Asked what could I have done differently I could have stopped I could have Stopped six months before I lost Everything and I would be a Millionaire Right now if I would have just stopped And what do I mean by sto stopped my Reckless spending habits and if I would Have just pulled back canceled my
Subscriptions stopped going out to eat And just save my money I would be so Much further ahead so that's what I Would say that's one of the solutions Right there but another solution is you And you loving people you serving your Community and empowering yourself I have Links in my description for free courses Courses that I made that took me 22 Years of my experience to put together So I really hope you're taking advantage Of that but either way you guys I hope You have a great rest of this week good Morning thank you for thank you for Getting up early with me today thank you For listening to this it's been one heck Of a journey I want nothing more than For each and every one of you to win now If you're out there investing real Estate you guys already know I wish you Luck and I hope you win
