March 13th, 2014
In today’s blog, we’ll look at short sales, HARP predictions, and new-home building trends.
There’s nothing short about a short sale. You’re dealing with extra levels of bureaucracy and complexity as you have two lenders. In a short sale, you need the seller’s bank to approve before you can close. Banks require dozens of pages of paperwork to evaluate whether or not to approve a short sale. Since the seller is asking the bank to accept a sale price that’s less than the mortgage amount, the bank needs to verify that a short sale is the right thing to do. The word “short” comes from the fact that the market value is shorter than what is owed.
The bank is highly motivated to wait and see if the situation will get better or if it really makes sense to approve the sale.
The best way to speed it up is to find a reputable real estate agent who has experience and can help move the process through more quickly.
Five years after the federal government bailed out more than 1 million struggling homeowners, many who got the relief may end up losing their homes after all.
The numbers show that 30% of the homeowners who qualified defaulted on the loan again.
Additionally, with the government not purchasing bonds to keep interest rates low, homeowners are seeing an increase in their monthly payments. In some cases, the payment has been raised by over $1000. Regulators and consumer advocates fear that more homeowners will get behind on their payments again.
The original initiative believed that the jobs market would bounce back faster than it has. Because of these factors, some are wondering if the feds will start buying bonds again to lower interest rates.
After all the increases take effect, the median monthly payment would rise by about $200 a month, according to a recent analysis of Treasury Department data. But many will face steeper increases. In California and Hawaii, which have a high concentration of HAMP modifications, the median increases will be $300 and $356, respectively. In California, payments will jump by as much as $1,724 in some cases.
If you are being impacted by increased rates, talk with a reputable mortgage officer sooner rather than later to find a better alternative. Don’t wait until you’ve gotten behind in payments and damaged your credit score.
The percentage of homes being built as rental apartments is now the highest in forty years. This could cause some interesting problems as the improving jobs market spurs younger Americans to form their own households but tighter lending standards make it more difficult to buy.
The move toward apartment construction reflects the convergence of several trends. Mortgage credit is still tight, and interest rates are increasing. Americans have seen minor wage gains, and others still have high student-debt loads, forcing people to rent instead of buy.
Home builders believe that the Millennial generation will be wanting to move out of their parents home, and into a smaller, more affordable home of their own. Additionally, the Millennial generation prefers smaller dwellings that require less care. They’re more interested in their jobs and travel.
Are you interested in the new rental apartments?