Hi and welcome to another edition of Mark’s Mortgage Minute.
Mortgage Planners are the elite athletes of the Lending industry and I have a responsibility to provide you with current, accurate information that’s designed to help you gain the winning edge.
Economic indicators show we are expecting to see a large amount of foreclosures early this next year which may hinder the housing recovery. Last Thursday on Capitol Hill FHA commissioner David H. Stevens had acknowledged the possibility of 20% of FHA insured loans last year and 24% from 2007 are facing serious problems including possible foreclosure. Some analysts believe F.H.A. will need a federal bailout to survive. Commissioner, Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.
Believe it or not, with F.H.A under this kind of pressure, we may see lending guidelines get a little bit tighter. The first change we may see could be to increase the borrower’s credit score requirements. There is also the possibility F.H.A. would require more than the current 3.5% standard.
On a positive note; Because of recent talks of our improved economy we should see more homes being listed by those homeowners who aren’t currently in a distressed situation. To be specific we’ve already seen an increase in sales for homes below $250,000. What that means is the $8,000 first time buyer tax credit is working.
It is believed by many the current $8,000 Tax credit for first time buyers will be extended. Until something official comes through the current tax credit is set to expire on November 30th, which happens to be 49 days from today. However there is one very important variable to take into consideration. Thanksgiving falls on Thursday November 26th. Most if not all Banks will be closed from Thursday the 26th – to possibly Monday the 30th. That is 5 days that could be cut off for buyers to receive the tax credit. In reality we need to prepare our clients to plan on closing on their homes no later than Tuesday the 24th, or Wednesday the 25th.
Even with all of the industry turmoil my team and I are still able to close loans as fast as 7 days. We’ve worked very hard to create a system that’s designed to close your deal fast and to close it clean while giving your clients the proper advice.
Thanks for your time, I look forward to hearing your Thoughts