REALTOR® Magazine-Daily News-Fannie Mae Cracking Down on Strategic Defaults
JMO:
For many states with anti-deficiency statutes, like Arizona, the possibility of being sued is minimal. However, the bigger "take away" from this article is that lenders are being pressured to do "principal write-downs". In effect, writing a new mortgage based on current market value and conditions. This would be a huge step in slowing the pace of foreclosures, deeds in lieu and short sales. I'm also waiting for Fannie/Freddie to realize that we need to create some benefit for owners of investment (rental) properties as well. Right now, all the government endorsed programs are designed to benefit owner-occupants of primary residences. I'll continue to follow these developments and keep everyone updated.
Thursday, June 24, 2010
Thursday, June 10, 2010
Foreclosure rate steadies as banks hold back - Mortgage Mess- msnbc.com
Foreclosure rate steadies as banks hold back - Mortgage Mess- msnbc.com
JMO:
The most significant part of this article was the statement that home buyers with good credit and conventional fixed rate loans are now the fastest growing group of foreclosures. This means that it can no longer be blamed on sub-prime, adjustable rate borrowers. This is a good indication that something will change soon because if the good borrowers are now being turned into sub-prime borrowers we will need to see new loan programs created otherwise the real estate market is likely to stall. On a side note: we are starting to see year-over-year appreciation in certain markets in the U.S. (16.2% appreciation in the Phoenix Metro Area according the NAR). If homes continue to appreciate and rates go up (very likely), you will see the pool of qualified buyers drop significantly. At this point the only thing I can see happening is for the Fed to artificially suppress interest rates to allow for property values to continue to rise. This would serve two purposes: 1. It would benefit banks by bringing values up and mitigating some of their losses and 2: it would stimulate home buying.
JMO:
The most significant part of this article was the statement that home buyers with good credit and conventional fixed rate loans are now the fastest growing group of foreclosures. This means that it can no longer be blamed on sub-prime, adjustable rate borrowers. This is a good indication that something will change soon because if the good borrowers are now being turned into sub-prime borrowers we will need to see new loan programs created otherwise the real estate market is likely to stall. On a side note: we are starting to see year-over-year appreciation in certain markets in the U.S. (16.2% appreciation in the Phoenix Metro Area according the NAR). If homes continue to appreciate and rates go up (very likely), you will see the pool of qualified buyers drop significantly. At this point the only thing I can see happening is for the Fed to artificially suppress interest rates to allow for property values to continue to rise. This would serve two purposes: 1. It would benefit banks by bringing values up and mitigating some of their losses and 2: it would stimulate home buying.
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