Distressed home loan borrowers are set to receive some level of financial relief as the national mortgage settlement filed in February in federal court demanded $ 25 billion in compensation from the top five big and bad mortgage service banks; Bank of America, Ally Financial, JP Morgan Chase, Wells Fargo and Citibank. Each are required [...]
The federal government has stuck to their guns to support the reduction of home mortgage loans that they are willing to purchase. Fannie Mae and Freddie Mac will step in to buy loans for a maximum figure of $ 417,000. The Naples-Marco Island area where limits were previously set at $ 531,250 and have been reduced to $ 448,500.With these revised limits the natural course of action may be to look at the new realm of jumbo financing that begins where……
on October 1, 2011 Fannie Mae and Freddie Mac will reduce the maximum mortgage loan amounts from $729,750 to $ 625,000?In Naples, a total of 273 homes were sold for over $ 1 Million within the first quarter of 2011, yet a majority of these properties were purchased with cash funds.While these government run entities may be getting out of the jumbo loan market, Guy Cecala from Inside Mortgage Finance believes that other players are making a move. The market is already moving to compensate for the new regulations and private lenders will slide in to fill in the funding gap. Should a lender wish to write loans over $ 625,000 the lender will be required to hold the mortgage themselves or find a private investor to buy them. It seems as though all lending routes for jumbo loans may end up in the hands of private lenders? The impact of this eventuality may not be felt in our market for some time..which gives us all food for thought.
Fannie Mae has launched a special offer for buyers who purchase a Fannie Mae owned home. Purchasers will qualify for up to 3.5% in closing cost assistance provided they meet certain qualifications.This latest incentive is a win-win for both parties. Traditional buyers face a tough road obtaining financing as banks have clamped down on available loans. HomePath financing offers buyers an alternative mortgage source and, albeit, temporary closing cost incentive. Fannie Mae hopes that this incentive will persuade droves of buyers to purchase a Fannie Mae owned home, thereby reducing its growing inventory of properties.
The temporary incentive will give traditional buyers an opportunity to take a hard look at Fannie Mae owned homes and possibly be swayed to purchase one given the allure of free cash. Regardless of the incentive; buyers who purchase homes now, with the intention of staying put for a few years, will do wonders for every micro market. Does Fannie Mae realize that it’s attempting to systematically stabilize prices throughout the nation? Whether you are a fan or foe of this government entity, you’ve got to give them credit for trying!
February 25, 2011. Earlier this week in Naples, Chief Economist for The National Association of Realtors, Dr. Lawence Yun presented his housing and economic outlook for 2011. Naples Meridian commentary regarding the recent political unrest in the Middle East and its economic effects follows the highlights.
The credit crisis annihilated the jumbo loan market. Banks simply stopped making loans available for “expensive” homes”. According to Inside Mortgage Finance Publications Inc, jumbo mortgage lending increased by 20% in the 2nd quarter of 2010 as compared to first quarter figures. Originating $18 billion in jumbo loans for the quarter is a healthy start though there is still room for improvement. Buyers seeking to purchase a vacation home or condo may find qualifying for a jumbo loan via a large bank to be difficult. Processing delays, rigid requirements and bureaucratic red tape is pushing borrowers to seek alternative resources. A mortgage specialist or local lender may be able to structure the loan in an efficient and timely manner. Regardless of the mortgage source, underwriting continues to be strict. Borrowers need to exhibit stellar credit profiles, provide detailed income and personal documentation, and must contribute at least 20% of their own funds toward the purchase of the property.The resurgence of jumbo loans is a step in the right direction.Borrowers that have been sitting on the sidelines, due in part to the lack of financing options, should view the revival of jumbo loans in combination with low interest rates as motivating factors.No one knows exactly when the scales will tip in favor of sellers over borrowers. Yet when purchasing power becomes fluid in all price brackets there is a tendency for the tide to change on the proverbial dime.
Since the housing bubble burst, appraisers have come under intense pressure for failing to account for actual market conditions. Though it is not all doom and gloom as national news is not always in line with the local perspective. What better way to safeguard your future investment than by selecting to work with local industry professionals who not only understand the local market but are privy to the nuances and trends within the markets. Local appraisal companies want to engage sellers at an early point in the process to provide an actual snapshot of market value based on true comparables in their neighborhoods. Should the presence of short sales or foreclosed properties threaten to sabotage the sale or purchase, individuals can at least count on having a robust conversation with the lender or appraiser. Local lenders and appraisers are focused on client’s best interest and are dedicated to keep the community moving forward in these uncertain times. Buying locally is all the rage for a sustainable environment. Applying that same practice to our home buying/selling practices may just save us all some heart ache, and be the key to working intelligently within the ever-changing system.