Foreclosure Fears……..Help is on the Way
This week we wanted to take a closer look into the results of the sub prime collapse and how it will affect so many of us. We read that 2 million homes have now foreclosed and we wanted to offer some better understanding of foreclosure. We crawled the web to find some high quality credible stuff on the help now jelling over the pain of 2 million foreclosures and rising.
But first lets take a short look at he current markets
MarketWatch: Mortgage applications up as yields fall. The Mortgage Bankers Association (via MarketWatch) said that mortgage applications were up about 3% and almost 20% over last year, indicating healthy activity and helping balance the view that the sky is falling. Obviously a lot of folks still want real estate. It is interesting to note that at the same time yields fell making homes just a little easier to carry.
National Multi Housing Council: Investment Returns on Apartments. Demographic trends suggest that demand for apartment living should continue to moderately. In 1990 the value per square foot of a multi family property was $57.07 and by 2003 it had grown to $97.02. When home sales are flat to down rents tend to be strong and apartment units are priced as a multiple of rent rates or cash flow…..strong markets for apartments. There is an interesting article at yourpropertypath.com about the new amenities available and how an owner might increase rent rates and fill vacancies faster and present a modern face.
NAHB: New Home Sales Tick Up in March in Uncertain Climate. “The increase in home sales for March was quite disappointing, considering the weather-related weakness recorded earlier this year,” said David Seiders, chief economist for the National Association of Home Builders (NAHB).
The sudden tightening of mortgage conditions has had a profound impact on the housing market, and it is hard to know how far the credit pendulum will swing,” Seiders said. “NAHB’s forecast still shows improvements in home sales and housing production by the second half of this year, although these forecasts are subject to an unusually wide range of risk.”
"Since the housing boom went bust last year, sales and prices have gotten hammered by a glut of homes on the market. While home inventories shrank 1.6 percent last month from February and are now down about 3 percent from the record highs hit last July, they're still up 17 percent from a year ago."
Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property immovable property due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage or "deed of trust". Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property.
What is it: Basically, the owner cannot pay the bank or lender and a series of options come into play.
1. The lender can sell to another and avoid the foreclosure proceedings, since it can affect credit.
2. The owner can call one of the home counseling agencies and see what kind of deal can be made to keep the owner in the house and help buy time. (see Your Property Blog of April 21 2007)
3. The lender can buy back the property, often for the value of the mortgage and sell it in the open market
4. If a buyer does not step up and the lender does not want it then it goes to auction and is for sale to the public, generally at a discount.
Help is on the Way…
NACA: issues a press release indicating they will offer a billion dollars to rescue victims of predatory lending. There is more information on the NACA site that may be helpful
Fannie Mae: has produced a foreclosure workout guide they insist you should read before you do anything. NOTE: They can be reached by calling 916.408.0494 for immediate assistance.
The Your Property Path web site has a good deal of informative articles on mortgages and the April 21 blog that is part one of this series that may be helpful.
What if You Own Now…
The Real Estate weekly on the MarketWatch web site considers the impact of a foreclosed home in your neighborhood and what it does to the value surrounding homes. If you are in an area that is experiencing foreclosures near your property there are some steps you can take to protect your home values. It can be found located here
The Your Property April blog pointed some interesting articles for those owners who find themselves new landlords because they cant sell at their price. Consider renting and managing your property. Begin by talking to your local apartment association since the laws can be difficult. It may even make sense for you to consider hiring a property manager. We have a discussion on how to hire a property manager at yourpropertypath.com that will go a long way towards helping you figure out if that is the right thing for you. As always, good luck!
Its Your Property