As of the most recent report, 5.5% of all mortgage loans have entered into the payment forbearance plan, which essentially delays the mortgage payments due date. Lawmakers announced this program without a plan to help the loan service providers who will still be obligated to make the principal and interest portion of the payments that would otherwise be due to the bond holders who provided the money so each borrower could own a home. That equates to about $2.3 billion in payments that will need to be made on loans where the borrower is not making payments. This has the mortgage industry on the verge of collapse. Without the Us government stepping in to help cover the cost of the program they graciously provided, our housing industry could suffer serious unintended consequences. Hopefully we see a bailout soon.
Stocks are falling in early morning trading as fears of an insanely high unemployment rate melts into the minds of investors. Before the Covid-19 breakout, there were about 6,000,000 people considered to be unemployed. With a labor force of about 164,000,000, that equated to a 3.5% unemployment rate. Over the past few weeks, we have added 22,000,000 to that number, making the count as of last week at 28,000,000. With a current unemployment rate at 17% and likely growing to 25%, the US economy is in serious trouble.
We will maintain a locking bias.