Drop in “Home Loan Limits” Has Many Concerned

In less than a month, Fannie Mae and Freddie Mac will scale back the size of loans they buy from lenders, which some industry groups are saying will hurt home sales and could further dampen a housing market recovery. The drop in the conforming loan limit may make it more difficult for some buyers to purchase homes in expensive markets, housing experts say.

The current loan limits are set to expire Oct. 1. If an extension isn’t granted, the maximum mortgage amount in high-cost areas will drop from $729,750 to $625,500 (although that limit will vary throughout the country).

Some banks, such as Bank of America, have already stopped taking new applications for jumbo loans at the current rate so that they can process the ones already in the pipeline in time for the Oct. 1 deadline.

The drop in the conforming loan limit is expected to impact 2 percent of homes nationwide, but will have a much greater effect in some areas. For example, some analysts say 10 percent of the housing market in New York will be affected. 

Pamela Liebman, CEO of New York real estate company the Corcoran Group, told USA Today that the new loan requirements will “put a lot of buyers out of the market.”

Meanwhile, lobbying efforts are continuing, as several industry groups, including the National Association of REALTORS®, are urging Congress to act quickly on a two-year extension to maintain the GSE loan limit at $729,750. 

 Source: “Coming Loan Changes Could Squeeze High-Priced Home Markets,” USA Today (Sept. 6, 2011)

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Enhanced by Zemanta

New Foreclosure Procedures Coming?

The country’s top mortgage servicers have reportedly reached an agreement on changes to their foreclosure procedures.

The consent agreement has not yet been made public, but The New York Times was able to get a preview of what the agreement contains from individuals who spoke on the condition of anonymity.

Among the proposed changes include:

  • Greater oversight of foreclosures. The oversight will happen from third party groups that include law firms, who mostly will be charged with doing the actual work of eviction, The New York Times reports.
  • Improved training of foreclosure staff.
  • A single point of contact for every defaulting home owner with the servicers. Mortgage servicers will no longer be able to foreclose while borrowers are pursuing loan modifications.
  • Servicers will hire independent consultants to review foreclosures that have been completed in the past two years. Mortgage servicers have agreed to compensate any owner who is found to have been improperly foreclosed on or made to pay excessive fees. 

Source: “Servicers Said to Agree to Revamped Foreclosures,” The New York Times (April 5, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com




Enhanced by Zemanta

“Affordability” Motivated Buyers in 2010

A Weichert, REALTORS® survey of 1,261 home buyers who made purchases between July 1, 2010, and Dec. 31, 2010, reveals that 28 percent were motivated by “favorable financing,” down from 31 percent in 2009 but up from 14 percent in 2008.

While 26 percent of those polled in 2005 said the desire to own a home and stop renting were motivating factors, very few respondents said the same in 2010. The survey reveals that 12 percent made home purchases because they had to relocate, 28 percent because they wanted a bigger home or more living space, and 11 percent because of potential financial growth.

Dominick Prevete, regional vice president for Weichert, says, “The takeaway is that home buyers who still see long-term potential financial growth in housing are more motivated today by the value presented by very low interest rates and discounted prices than they were five years ago. I think we are back in a period of a more realistic view of home ownership.”

Source: “Survey: Affordability Top Reason for Home Buying in 2010,” The Wall Street Journal, M.P. McQueen 

Other articles at: www.sierraproperties.com

Enhanced by Zemanta

GOP Bill Attempts to End Foreclosure Program!

House Republicans called the Obama administration’s foreclosure prevention program “a colossal failure” and have introduced a bill to end it.

Republicans are calling for the immediate end of the Home Affordable Modification Program. The program has been under attack from both Republicans and Democrats in recent weeks for the program’s failure to do enough to prevent foreclosures.

“It’s one more example of why government interference in the private sector doesn’t work and that’s why it should be repealed,” said Rep. Jim Jordan (R-Ohio), who introduced the bill, in a statement.

Administration officials have defended the bill, saying it has helped standardize industry practices and sparked more loan modifications in the private sector.

However, Republicans say that the program has been struck by low participation among home owners and has been far from reaching its goals. By the end of last month, about 522,000 home owners were enrolled in HAMP loan modifications. Yet, the program’s goal is 4 million home owners. The program has faced a high drop-out rate too: About 793,000 home owners who were once enrolled in HAMP have since left.

Source: “U.S. Republicans’ Bill Would End Obama Home-Foreclosure Program,” Dow Jones Business News (Jan. 28, 2011) 

Other articles relating to Placerville, California at: www.sierraproperties.com

Enhanced by Zemanta