Archive for June, 2013
Mortgage Rates are being hammered again. Today, June 24, 2013, the rate started the day out at 4.75%. Due to this recent increase in rates from 3.3% to 4.75% in just over 6 weeks, buyers have lost roughly 15% in purchasing power!
A buyer who was approved at $400k 6 weeks ago, can now only afford $340k using the same monthly payment today. This is going to affect all buyers not in contract yet. Buyers who have been shopping for homes for the past several months, or have been waiting on a short sale to get approved, should verify the mortgage payments, and desired purchase price range, to make sure the both are affordable with these new higher rates.
Shadow inventory held by Fannie Mae and Freddie Mac (The GSEs) and HUD “vastly” outnumbers REO (Homes that have completed the foreclosure process) properties the groups maintain, according to a joint report from the Office of Inspector General for the Federal Housing Finance Agency (FHFA which was created in 2008 to handle the failed GSE’s) and HUD. The report further warned HUD and the GSEs must pay close attention to shadow inventory, which threatens to increase their supply of REOs.
For the report, shadow inventory was defined as properties 90-days or more past due but not yet in foreclosure. They use these numbers as data shows that approx. 90% of the time homeowners 90 days or more delinquent end up in foreclosure.
As of September 2012, HUD held about 37,445 REOs in its inventory, while Fannie Mae and Freddie Mac had about 158,138 REOs, leading to a combined total of 195,583.
Meanwhile, the GSEs held 966,649 properties in their shadow inventory, while HUD was found to have 741,384 homes still in the shadows, for a total of 1.7 million properties.
Source: Chris Sorensen
Founder of The Help Program