The Market

The Market

There are some good trends in the market with one being that the housing is recovering even with the tight credit approval we are facing.  With still low down payment on FHA at 3.5% and a 5% down on conventional, it is a good market to buy.  If mortgage accessibility opens up (it is cyclic), we may just have a booming year in sales!

Now the downside is that Washington may change their policies and require more money down, like 20%.  They may trim or take away the mortgage interest deduction which is an advantage of owning over renting.  They also add capital gains on the home sale which we have not had for some years.  All of these would greatly halt the progress in home sales.

There will still be more unequal wealth distribution according to accondomist.  Homeowners are building wealth after buying at low prices.  Renters do not accumulate wealth and the renter population is rising simply because tighter credit hinders “good” renters from becoming homeowners.  Now we are seeing an increase share of property owners as investors and as a rule, too many investors in a neighborhood will bring the neighborhood down since properties are not usually maintained as well.  Owning a home is really down right now at a rate of 65.5% of the population which is the lowest in 15 years! Homeownership has always been the avenue in accumulating wealth for people. 

If you are renting, check out the possibility of owning a home and give us a call. 

Foreclosure Postings Rise in April, 2011

Yes, we do have a whopping 16% increase for the April foreclosures compared with a year ago. There was a dip of 4% over the first 4 months of this year so that is good. Roddy states” The numbers appear to be moving in the right direction, but things are so unstable.”

I still think the Banks should have dumped the majority of the foreclosures in the first 6 months of last year, the tax incentive would have encouraged more buyers out to gobbled up the foreclosures. Remember also last year the Banks weren’t dumping them on the market because the government was taking care of their losses.

Roddy being quoted again, “foreclosure postings won’t improve until unemployment goes down and the number of homeowners ‘underwater’ on their mortgages..meaning they owe more than the house is worth..stops increasing.” Can’t pay your house payment without a job, especially when you did a 100% financing and have no equity or just the fact that if you bought in last 4 years, our market is flat so where are you getting the money for all the closing costs in trying to sell?

We would be happy to give you some options if the job market is still hurting and clouding your future and you own a house.

Are you ready to buy a foreclosure?

If you are interested in foreclosures, this would be a good checklist to go over before buying a Bank-owned property.
1. Have you ever bought a foreclosure before?

2. Why do you want to buy a foreclosure? A good buy in your mind?

3. Is this for a primary residence or for an investment? As an investor, it is easier to walk away from the transaction, but if for yourself, it will be harder because you are emotionally involved.

4. If this is a primary residence, when do you need to move into the home? These transactions can take longer so you need a Plan B if the transaction drags on longer if you need to move quickly.

5. Do you have financing available? Financing can be a challenge since some foreclosures cannot be funded with the mortgages we have right now! It may require cash or doing a 203K loan if they are available.

6. Are you prepared to make repairs? If that property needs work before you can get a mortgage, remember the Bank will not do any repairs. Then, are you willing and having the funds to do the required repairs?

Be sure you get with a good agent that can guide you in buying a foreclosure as well as having your financing situation worked out before hand. Call us.

What's Worse? Short Sale or Foreclosure?

You decide you want to do a Short Sale when you are upside down on your mortgage (you owe more than what you can sell it for), there are some requirements that will typically have to be fulfilled:
• The home’s current market value is less than the debt.
• The mortgage is in or near default. Lenders historically will not even consider a short sale unless the loan is delinquent and in default.
• The seller has a true hardship with little hope of bringing or keeping the loan current or of being able to make up any deficiency between the net sale price and the amount of the debt. Some hardships would be loss of job or income, divorce, medical costs, emergencies, death, bankruptcy.
• The seller has no other assets with which to pay back all or part of the debt.
• The borrower is unable to qualify to modify or refinance the loan.
What’s the after effect of having a short sale or foreclosure? A short sale remains on the credit report for seven years; the impact will diminish in a couple of years as long as it is the only blemish on the credit score. A foreclosure will stay for the 7 years. Usually, there is taxable income for the borrower that has a Short Sale.
(The Real Estate Center @ Texas a & M University)

Should You Walk Away From Your Mortgage?

Most consumers say it's unacceptable for homeowners to stop making their mortgage payments and abandon their homes, according to a Pew Research Center survey reported by Trey Robertson with Nortex Mortgage.

More than a third (36%) say the practice of walking away from a home mortgage is acceptable, at least under certain circumstances. Nearly six-in-ten (59%) believe it is wrong for homeowners to deliberately stop paying their mortgages and surrender their homes to the mortgage lender, according to the survey. But two-in-ten (19%) say it's acceptable and an additional 17% volunteer that it depends on the circumstances.

What do you think? Or what would you do if you were upside down in your mortgage and lost your job? Under what circumstances would it be alright to walk away from your contract commitment to repay the loan that you signed when you bought your home?

Do you know the consequences of walking away from a mortgage? How long it will be on your credit? How long before you could purchase again? Will the mortgage company come after you and sue you? Can they do that?

Good questions and would be happy to answer any of them if we can. The trouble is when we hear of owners living in their houses "free" for many months, even over a year without paying a payment before the Bank foreclosures, it does anger us that scrap and tighten up our belts in order to be current on our mortgages and we may be hurting also.