Archive for September 2008
Banks: No Exceptions for Short Sales
Increasingly, sellers seeking short sales are encountering a new twist.
Lenders are agreeing to let some short sales go through, but they want the home owners to sign a note promising to pay some or all of the balance due – debts that could burden borrowers for the rest of their lives.
Moody’s Economy.com estimates that about 10 million home owners have negative equity, a condition known colloquially as being upside down or underwater. By next June, the forecasting company expects the total to rise to 12.7 million — a quarter of all home owners who have mortgages.
“The first wave of foreclosures involved a lot of investors who just disappeared,” says Lance Churchill of Frontline Seminars, which teaches real estate practitioners how to negotiate with lenders on short sales. “Now, home owners with jobs and assets are underwater and want to sell. The banks want as much as they can get, today or in the future, and the owners want to get away clean.”
If the lender does a short sale without extracting anything from the seller, everyone in the country who is upside down could try to wiggle out from under and banks will take a fresh wave of hits. But if the lender pushes too hard, the borrower will default, leaving the bank in worse shape.
How Much Is $700 Billion Anyway?
The proposed financial bailout package being considered by lawmakers will come at a cost of as much as $700 billion.
To put it in perspective, using numbers from the U.S. Census, the $700 billion is equal to:
- About $2,300 per American
- About $6,000 per U.S. household
- About 85 percent of the New York State economy
- The combined economies of all U.S. states beginning with the letter “A”: Alabama, Alaska, Arizona, and Arkansas; plus Oklahoma.
The tally for all the various rescue measures launched by U.S. authorities this year runs to about $1.8 trillion. The $1.8 trillion is equal to:
- About $6,000 per American
- About $15,500 per U.S. household
FHA Raises Upfront Premiums
The Federal Housing Administration announced Tuesday that it is increasing the upfront premiums charged to most borrower to guarantee that a mortgage will be repaid. Read the rest of this entry »
Chester County bucks housing trend
Chester County is largely bucking the national trend when it comes to existing-home sales, which are still free-falling in some parts of the country. Existing homes sales fell 7 percent in July, when compared to July 2007, but the rate of decline here is far less than it has been and certainly lower than it is nationwide. In first-quarter 2008, sales fell 37 percent in Chester County but only 15 percent in the second quarter, when compared with a year ago.
Despite injunction attempt, sewer project contract awarded
Residents of Northampton Township filed an injunction last week on behalf of Northampton Area Residents for Reasonable Sewers (NARRS) asking that county court prevent the township from entering into any contracts that could cause “financial hardship to the members of NARRS.” Read the rest of this entry »
Looking for buyers on the Main Line – The fever for big houses built on spec cools off
For at least five years, the practice of tearing down existing, older homes in neighborhoods along the Main Line and putting up new speculative mansions was common – until now. The market for tear-downs and homes built on spec, without buyers lined up, has come to a halt, a casualty of the housing downturn. Most developers with existing properties on the market are adjusting their prices downward.
End in Sight for Seller-Funded Down Payments
Prospective homeowners have until Oct. 1, 2008, to use down payment assistance from a seller to purchase a house. Read the rest of this entry »
