Foreclosures, Sub Prime Loans… What’s Next?
September Economic Outlook, Is It Good or Bad?
Loans, Sub Prime Loans and foreclosures are on everyone’s mind these days and rightly so. If you are thinking about refinancing or purchasing a home, the qualifying criteria has changed. In fact, at least 25% of the buyers who could qualify for a loan two or three months ago now cannot. Zero down loans and stated income loans are almost a thing of the past. They still do exist, but are much harder to qualify for. For most loans you will have to document your income unless you’re putting down a very large down payment. Another phenomenon in the loan arena is loans being pulled in the 11th hour due to changing loan programs because of the sub prime mess.
Last month I attended an industry luncheon at the Bacara Resort where the Guest speaker said that Countrywide, despite all the press, will survive the mortgage melt down but a lot of smaller companies will close their doors. I asked him how they are handling loan programs that are being pulled and this is what he told me: if you use a direct lender for a loan and get full approval under the new guidelines, your loan would not be pulled if they change programs. If you are going through a loan broker and the same thing happens, your loan could be pulled: A lot of it depends on the broker. His recommendation is to stay with a large direct lender to play it safe. I would also highly recommend that you ask the lender these questions before moving forward with a loan and fully understand what you are getting into.
I am familiar with several transactions that have been pulled one or two days before closing. This put the buyer’s deposit in jeopardy because all contingencies had been removed. These days it is a smart thing to make the sale contingency on the loan funding.
Ninety-one percent of the foreclosures are occurring in the North County and are up substantially, while Santa Barbara has been protected and only experiencing a small number of foreclosures. However there are many urgent sales which never make it to foreclosure.
The median price currently is $1,260,000, up over last year and the numbers of sales for August are down 20.9% and September is down 27.3% over last year. This year has been very good up until August and now only time will tell how next year will play out. Another Real Estate and Economic Forecast was held in September and this is what Mark Schniepp reported: dramatic price correction is not expected in 2007, more foreclosures are expected till early 2008, rate cut should help the market, 2008 could be another sluggish sales year and Hope Ranch and Montecito will continue to have strong sales. I think in the next two years there will be a lot of good buying opportunities before the next big upswing.
If you know of someone that is thinking about buying or selling your referral would be greatly appreciated. Please feel free to call me with questions anytime.
September Economic Outlook, Is It Good or Bad?
Loans, Sub Prime Loans and foreclosures are on everyone’s mind these days and rightly so. If you are thinking about refinancing or purchasing a home, the qualifying criteria has changed. In fact, at least 25% of the buyers who could qualify for a loan two or three months ago now cannot. Zero down loans and stated income loans are almost a thing of the past. They still do exist, but are much harder to qualify for. For most loans you will have to document your income unless you’re putting down a very large down payment. Another phenomenon in the loan arena is loans being pulled in the 11th hour due to changing loan programs because of the sub prime mess.
Last month I attended an industry luncheon at the Bacara Resort where the Guest speaker said that Countrywide, despite all the press, will survive the mortgage melt down but a lot of smaller companies will close their doors. I asked him how they are handling loan programs that are being pulled and this is what he told me: if you use a direct lender for a loan and get full approval under the new guidelines, your loan would not be pulled if they change programs. If you are going through a loan broker and the same thing happens, your loan could be pulled: A lot of it depends on the broker. His recommendation is to stay with a large direct lender to play it safe. I would also highly recommend that you ask the lender these questions before moving forward with a loan and fully understand what you are getting into.
I am familiar with several transactions that have been pulled one or two days before closing. This put the buyer’s deposit in jeopardy because all contingencies had been removed. These days it is a smart thing to make the sale contingency on the loan funding.
Ninety-one percent of the foreclosures are occurring in the North County and are up substantially, while Santa Barbara has been protected and only experiencing a small number of foreclosures. However there are many urgent sales which never make it to foreclosure.
The median price currently is $1,260,000, up over last year and the numbers of sales for August are down 20.9% and September is down 27.3% over last year. This year has been very good up until August and now only time will tell how next year will play out. Another Real Estate and Economic Forecast was held in September and this is what Mark Schniepp reported: dramatic price correction is not expected in 2007, more foreclosures are expected till early 2008, rate cut should help the market, 2008 could be another sluggish sales year and Hope Ranch and Montecito will continue to have strong sales. I think in the next two years there will be a lot of good buying opportunities before the next big upswing.
If you know of someone that is thinking about buying or selling your referral would be greatly appreciated. Please feel free to call me with questions anytime.
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