As we do at the end of every week, let’s spend a few minutes reviewing the latest content from HSH.
This week’s posts showcased how the White House’s “reactionary policies” can be unproductive, some important developments to keep your eyes on, as well as our continued focus on mortgage rates and mortgage assistance.
Thursday: Read the rest of this entry »
Here is the last chapter in this saga. Unfortunately for the couple who wrote this first-hand experience, their latest snag in the home-buying process remains unresolved, leaving their fifth offer to remain in limbo.
This latest twist that has prevented the couple from closing on their home is a scenario called “post-foreclosure bankruptcy”: Read the rest of this entry »
Earlier today we posted a story from the Real Estate Wonk (Jamie Smith Hopkins of the Baltimore Sun) of one couple and their unsuccessful attempts at buying a home in today’s unique real estate market. The couple, Peter and Karen, saw all types of properties, everything from foreclosures, to short sales, even “regular” sales. After three months of searching and almost 80 homes in their file, not one of the couple’s offers had been accepted.
Even after the couple had finally had an offer accepted, and after the inspector gave the home a passing grade, more and more factors — again, brought on by the home-buying era in which we are now in — came into play, stalling the buying process even more: Read the rest of this entry »
We’ve consistently noted that perhaps the largest hurdle facing borrowers in this current real estate market is securing financing. Mortgage rates have been historically low for almost a year now, real estate prices are nearing a bottom (if they haven’t reached one already), and incentives like tax credits have been extended and expanded to lure potential buyers to the market. However, credit conditions remain extremely tight. With all that being said, one could speculate that as soon as you secure financing, the home-buying process should be smooth sailing, right? Well, not for one couple.
Our friend Jamie Smith Hopkins at the Baltimore Sun is running an interesting series in her blog, “The Real Estate Wonk,” on first-hand experiences from the home front. “Dispatches from the home-buying front” details the experiences of one couple from the Maryland area who are in the market to purchase a home in today’s unique marketplace.
UPDATE1: We thought so, and said just as much last Friday…we just had no idea it would happen this quickly. A short bulletin from National Mortgage News (NMN) this morning reported that the Treasury Department’s Office of Homeownership Preservation (OHP) announced at the Mortgage Banker’s Association’s annual conference that a new wrinkle to the Federal loan modification program is coming soon. Laurie Maggiano of the OHP said the new loan mod effort will be designed to assist borrowers who don’t fit into the current modification mold.
Looking through the latest numbers, we speculated on Friday that it may be time to alter the current structure of loan modifications; according to statistical reports, loan mod issuance has slowed (see original story below), redefault rates are high, and ‘foreclosures in process’ continue to grow.
Even just a few years ago short sales were a widely unused practice; the state of the marketplace didn’t call for it. However, as falling home prices, massive waves of foreclosures, and unemployment cripple today’s real estate market, short sales have jumped to the front of the line. But since the practice has become so popular, lenders are beginning to change the rules in their favor:
The rising tide of “short sales” by troubled home owners facing foreclosure is prompting lenders to become more aggressive in their attempts to pursue former homeowners for their loan losses in a short sale. In a short sale, a house is sold, with a lender’s approval, for an amount that won’t pay off the mortgage on the property.
Fannie Mae has begun a pilot program in two of the worst housing markets in the U.S. to determine if short sales can exist as a viable alternative to foreclosures. A short sale enables a homeowner to avoid a foreclosure by selling their home for less than the value of their existing loan. Yet, getting mortgage investors to agree upon who takes a loss has been the main hurdle preventing the measure from becoming a viable, broad-based solution.
In general, there are three knowable outcomes for a home loan that investors can prepare for. History says the loan will be either repaid in full, refinanced or paid off early (refi sale), or fail (foreclosures). Lenders, brokers, and guarantors are now being socked — and are unprepared — for mass volumes of alternative outcomes — loan modifications, short sales, and now potentially “cramdowns.”
HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.
