Loans Increasingly More Difficult to Obtain

Yes, lots of mortgage money is available. However, for many, the requirements to access this available money is still getting more stringent. FannieMae (FNMA) announced earlier this week that they were Increasing the 'Declining Market Delivery Fee' to .5% as of October 1st (which will of course be passed onto the consumer in the form of Higher closing costs or Increased interest rate).

Also, another trend is 'Credit-Scoring' the interest rate. Although this has been the case for quite some time, the Secondary Market is now looking at slicing the rate into far more credit score tiers.

I don't disagree with the rational of all of this, however, for anyone lookig to buy in the near future (that does not have a very high credit score) should not try to time the bottom of the market because it could really end up costing you more in the end.

Foreclosure Deeds in MA Reach A Record in April, 2008

I received an email this morning from Banker and Tradesman (a publication of The Warren Group) indicating the following:

"Massachusetts foreclosure deeds soared to their highest recorded level in April, according to The Warren Group, Banker & Tradesman’s parent company. The number of deeds so far this year outpaced those in the first four months of 2005 by 1,165 percent."

Sounds bad doesn't it? But here are some points to consider:
These foreclosures are largely a result of activities that took place 2 to 4 years ago.

Since then:

• Lending Standards Have Tightened significantly (and in my opinion; TOO much).
• 100% financing is no longer available to 'Just Anyone' anymore.
• Prices have adjusted.
• Conventional Fixed Mortgage are still Historically 'Good'.
• Conforming Loan Limits in some counties have been increased (unfortunately Not in Worcester County).

So what does it mean for Sellers?

• You MUST price your property correctly for The Current market we are in!
• You MUST have your properties Marketed aggressively!
• Your property MUST be Better than every other that you are directly competing against!

So what does it mean for Buyers?

• You have a Great Opportunity right now!
• Mortgage Rates are Historically LOW!
• There are Many Homes for you to choose from!
• You are 'Buying Into a Down Market'!
• Your lender does NOT want to put you in a situation where you will face foreclosure!
• The Real Estate Market will go up again - not sure when - but it will!

So Remember The Following:

• ALL Real Estate is LOCAL!
• Nobody will see 'The Bottom' until we are past it!
• Mortgage Interest Rates Cannot stay this low Forever!
• The Real Estate Market is Worse in some parts of the country and is Better in others!
• The "media" cannot sell 'The Middle' of any story. Only extremes can sell papers/tv/etc... so they always report on the worst!
• Always use the most Knowledgeable and Reputable Realtor that you can find to assist you if you are selling OR buying!

Fannie Mae (FNMA) Takes Away Declining Market Penalty

On May 16th, 2008 FNMA (otherwise know as Fannie Mae) has repealed the reqirement that borrowers in 'Declining Markets' put an Additional 5% down payment on top of the typical down payment required for the program Effective June 1st, 2008. This is GREAT NEWS for Worcester Country, MA which was declared by FNMA as a declining market (FNMA's definition of a declining market is 2 consecutive quarters showing 1% or more decline in value).

This provision was pretty unreasonable given the current climate and has further aided in the slowdown in the market in 'declining markets'. In addition, FHA Lons have gained in popularity over the past few months due to low downpayment requirements and the realative ease of qualifying borrowers (especially first time borrowers) - In essence FHA was eating Fannie's lunch!

More lending opportunities can only help this market which still is ripe with opportunity.

Could it be that 'common sense' is now starting to prevail in the mortgage lending markets?

What do you think?