Welcome back to real estate mindset Today's video is going to be absolutely Bonkers now the data is in and today we Have black Knight's updated report for Foreclosure and default data so we'll go Into that report and then after that Report I'm going to go into the consumer Health as far as how much money can People save credit card debt auto loan Debt bankruptcies and evictions and if You guys can't remember I'm not a Financial advisor even though my bio is As a realtor loan officer and instructor In real estate and I have been someone That has been helping consumers Predominantly first-time home buyers for The last two decades for that skill for That knowledge please you guys like this Video subscribe if you haven't already Shoot me a comment below and don't Forget you guys super important share This video I would really appreciate it Regardless we'll jump into the Black Knight report right now and as always You guys do not forget in order to Empower you in order to help you Formulate your own opinion everything Will be linked in my description below Now this says June 23rd right here but It is not June 23rd so this is actually July's report I can assure you that but Serious delinquency mortgages hit lowest Level since 2006. prepayments trended Seasonally higher in June despite
Elevated interest rates a couple of the Bullet points here inching up two basis Points for May the national delinquency Rate continues to hover near recent Record lows with Junes marking the third Lowest level on record and that's not Really a surprise because right now There's really no need for foreclosure So long as you purchase prior to the Middle of 2022 after the middle of 2022 There's probably going to be a need for Foreclosure but right now with massive Equity with super low interest rates the Ability to sell your house there's just Not a need for foreclosure there's still So much equity Second bullet point the number of Serious delinquencies dropped to 471 000 The lowest level since August of 2006 And 177 000 improvement from June 2022 And that is a remarkable Improvement but I do want to point out this if you Really pay attention here look at this Guys the lowest level since August of 2006 what happened in 2007 and in 2008 We had a horrible horrible foreclosure Crisis in the face of low serious Delinquency just like right now so what Am I trying to tell you guys and what Does that tell us it tells me that Things can change snap of the fingers if People stop making money if people start Losing their job it's game over and I Don't care if they purchased prior to
2022 if they can't sell their houses Because the housing Market's crashing And it won't matter if they have equity And I believe we're going to see an Overwhelming amount of short sales for Anyone that purchased 22 22 and on again Prior to 2022 as long as people didn't Refinance into a higher rate they're Going to be able to sell and they're Going to be able to cash out but again Think about it it's the lowest level Since August of 2006 right before the Great financial collapse early stage Delinquencies increased by 19 000 why Borrowers who've missed two payments Ticked up by 1.7 percent foreclosure Starts increased slightly to 27 000 for The month just one percent above the Preceding 12-month average and still 38 Percent below June 2019's pre-pandemic Level foreclosure was started on 5.8 Percent of serious delinquencies in June That's up 5.1 percent in May but still Three points below the start rate in May 2019 before the onset of the pandemic Again this all makes sense considering The fact that we don't need foreclosures Right now again unless you purchased After 2022. the number of loans in Active foreclosure shrunk another five Thousand in June and is still down 17 For March of 2020. meanwhile June 6.9 K Foreclosure sales marked a 1.5 percent Increase from May so all of that
Essentially means that on paper it looks Like overall homeowners from a Delinquency rate are doing pretty good However it's also telling us that Certain things are increasing which Basically is also telling us this if you Are in serious delinquency the odds of You getting out of serious delinquency Is a challenge and that is likely that You actually go into foreclosure so now We're starting to see that back end Start picking up when we go over the Numbers and percentages we can see that The top pretty much every single thing Is actually up except foreclosure pre-so That's down 2.5 percent but total U.S Delinquency rate is actually up 0.55 Percent month over month for a total of 3.12 that is historically low there is No denying that that is a pretty low Rate but also there's no denying how Quickly this can spiral out of control There is no denying that this can spiral Out of control super quick but total us Foreclosure pre-sale inventory is Sitting at 0.42 that is down month over Month by 2.5 now here's the big one Right this is where people start losing Their homes total foreclosure starts on 28 000 families in the month of June That's up month over month a whopping 10.3 percent so things are getting a Little bit worse for people that are are In serious delinquencies if you look at
Year over year That is down 11 again it should be down Being that home values have went up so Much now when we go to Total us Foreclosure sales they sold up almost 7 000 but they sold in June 6 900 for Closed houses that's a 1.45 increase Month over month and a whopping actually 14 increase year over year and I'd argue That's actually the thing that matters The most how many houses are the banks Taking and selling right that's up 14 Year over year now when we look at the Total number of properties that are Either 30 days past due but not in Foreclosure we're at 1.65 million that's Up 11 000. historically I know that Looks like a big number because it is a Big number 1.6 million families is a lot Of people but again historically that's Just not that high surprisingly now when We go to Serious delinquencies we're Sitting at again relatively low at 471 000. now that group of people is the Biggest at risk of losing their our House because they're already three Months behind now the number of total Properties that are in pre-sale Inventory are 224 000 homes just to let you know there are Certain places on the web that you can Go to access pre-foreclosure inventory If you want to get a jump start on Finding a foreclosure deal but I would
Caution you a lot of times they're beat Up but the total number of properties in Foreclosure or in default y'all 1.87 million that is actually up 6 000 So month over month that actually did Get slightly worse moving on over to the Top five states of non-current Percentage pretty much all The Usual Suspects except Pennsylvania sitting There at number four at a at a default Rate of 4.85 percent pretty high default Rate Mississippi sitting at number one At 7.4 percent that's kind of whopping But they did Peak somehow 23 October of 20 October 2005 and Louisiana actually Peaked at 30 default rate back in October of 2005 and again I just wanted To point out two that's 2005. we didn't Even start the Foreclosure crisis until What 2009-ish would you say pretty crazy Now here's the bottom five stage Washington's number one spot Colorado Idaho Oregon and Montana's on the list As well I always find this interesting This is the bottom five states of Monthly change in defaults surprisingly Idaho is up there at a 15 change Followed by Utah Arizona Delaware and Michigan very interesting overall the Foreclosure process and the loan Modification process to keep people in Their houses is working and how couldn't It if the lenders are willing to forgive Principal and give borrowers a much
Lower payment now on average when I go Into the loan prevention data most People are saving between 20 and 30 Percent off of their mortgage payment And then some people are also getting That plus some of their principal Forgiven so loan modifications you guys Are really helping a tremendous amount Of people stay in their properties now a Lot of people don't like loan Modifications I'm one person that thinks That maybe we should consider loan Modification depending on the hardship Another interesting fact is is the Average foreclosure takes over three Years to complete so in other words so Long is the banking system is okay and The banking sector is fine they'll Probably continue to push loan Modifications but I can also tell you Guys this the moment that those defaults Start to pick up and the banking system Collapses I doubt highly that these Lenders will be so forgiving when it Comes to loan modification looking at Just that not really not really too much Concern although we understand that that Can spiral out of control as a result of Things like unaffordability and the lack Of being sustained things like that Right but really what I want to do is Paint us an even bigger and broader Picture so that we can really dig in to The health of the consumer and let's
Start with credit card debt it never Ceases to amaze me this is consumer Credit card debt is basic guys in about Two years about two years in a few Months credit card debt has gone up by Over a quarter trillion dollars we're Sitting at 994 billion right now and Again in about two years we increased That by over a quarter billion dollars The debt spending right now you guys is Out of control and it's getting worse And credit card debt is literally the Worst legal debt I would say mob debt is The worst debt but this is the worst Debt you can possibly get in because the Minimum payments don't pay this down This is a trap this is a scam and there Are more and more Americans drowning in Debt every single day and that's not all You guys this is the Fred motor vehicle Loans owned again holy smokes ever since Lockdown this has been shooting up Because of all of the money printing the Inflation is not transitory the Federal Reserve printed the money and put it in Our checking accounts the inflation is Here to stay that's why we need more Quantitative tightening we need to stay In this environment but but we have 1.43 trillion dollars in car loans right Now and some people's car loans you guys Are a thousand dollars a month the Delinquency rate right now for subprime Vehicles is where it was during the
Great financial collapse subprime auto Loan market right now you guys is having An absolute meltdown and that's followed By commercial I'm not even going to go Into commercial real estate but auto Loans right now melting down and causing Companies to pull out of the Auto Industry entirely and if that wasn't bad Look at the personal savings rate for Americans this makes me so sad because I Know there's so many people struggling Right now and I know some people are Just going to struggle but there's also An overwhelming amount of people that Don't have to struggle but are Struggling because of the way they live Their life right buying too much crap Not saving enough but look at the Savings rate it's only 4.6 percent so Houses are only saving 4.6 percent of Their income prior to covert look at This it was almost double we were saying That eight and nine percent look at this Y'all Super set so we have this huge huge Money printing huge money dump and yet Lowest savings rate almost in history How depressing is this things are just So unaffordable and people are just such Bad Spenders America can't save money Anymore and taking a quick look at Evictions and I only want to look at Las Vegas you guys look at the evictions in Las Vegas
132 percent again 132 percent Above Pre-covet so this is above the average Absolutely shocking guys and this is all Over the place 150 percent above the Average 189 above the average 195 above the average 110 above the Average you guys the eviction crisis is Spreading to almost every metro area at Least big metro area major metro area Around the nation consumers are Suffering massively and one of the Reasons that is is there's so many Americans living paycheck to paycheck Absolute disaster catastrophe look at This map here guys people in the south On average 60.5 percent of people all People living paycheck to paycheck Saving no money anything happens at all They lose their job they're dead in the Water that's scary on the west coast 64 Percent of people paycheck to paycheck Crazy Midwest 61 percent North East 58.6 percent living paycheck to paycheck Now look at the bankruptcy files Individual chapter 13 filings are up 23 It's important to watch chapter 13 Because basically chapter 13 our Homeowner bankruptcies chapter 7 Bankruptcies is basically where you Could just walk away from your debt the 13 is is you kind of freeze your debt
Make payment plans but you get to keep Your house so all in all although those Foreclosure numbers were actually pretty Decent when we take a bigger look at the Health of the consumer and we look at The trajectory of the trends we can see A much clearer picture here and that Picture is potential default crisis Right around the corner it's probably Not going to start with mortgages but It's certainly starting in subprime Vehicles and spreading on over to other Consumer Debt sectors now other than That guys I really hope you enjoyed this Video you enjoyed this report if you can One more time like this video share it As well and if you're out there Investing in real estate you know I wish You luck and I hope you win
