Most St Louis home loan advocates have been wondering why the Federal Housing Administration (FHA) recently gave the green light for property flipping to FHA buyers and sellers?
More and more experts are saying that the FHA has seen the chilling, yet proverbial handwriting on the financial wall.
Now in order to prevent the absolute worse type of situation and that being another economic crash, more housing properties need to be sold as quickly as possible say many St Louis mortgage brokers.
On the surface, there are many necessary reasons for moving this real estate market forward.
1. While the sub-prime crisis may be showing signs of early stabilizing, the adjustable rate mortgage (ARM) crisis is just beginning to rear its ugly head.
Many economists are urging the administration to seriously consider the next possible epidemic to hit our fragile economy and that of course being the reset move of millions of adjustable rate mortgages that now are not refinancing candidates.
Hence, both buyers and sellers may be seeing more short sales transactions in 2010.
2. Counties in Default - There will be hundreds of counties and small towns nearing bankruptcy due to the growing number of tax defaults and foreclosures.
And here's the real bad news. When a town or county goes broke, it will put the homeowner's property even further underwater or in a negative equitable state. Definitely not the type of news homeowners want to hear.
3. The Great Commercial Collapse - As this country has faced its most dire residential trials with the housing market, we must brace ourselves for the coming commercial lending devastation.
There will be a need in the commercial market for trillions in refinancing loans if they can even qualify for this type of loan extension. Many business owners have already declared bankruptcy.
And most of them, even with positive cash flows, are as underwater as residential mortgages. As these businesses go under or will no doubt have to cut back, they will cause even more unemployment.
4. Loan modifications are simply not working - The St. Louis Refinancing Group news team has reported that unless and until there is meaningful principal reduction, most people getting a loan modification will stop making their payments if they are $100,000 or more upside down on their home.
The situation has evolved to the extent that homeowners who have negative equity in their homes are now voluntarily giving their keys to the lender and saying they are through.
In fact, there are a few banks that have put together such a "voluntary eviction program" where the owners give back the keys to their home and if it is in good shape, will not have to compensate the bank for any future losses on the property.
With the expense of foreclosures skyrocketing, more and more banks and lenders are allowing homeowners to simply walk away saving them time and money. This may also save us from another fiscal economic crash.
Article Source: https://www.bharatbhasha.com
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Article Added on Tuesday, August 23, 2011
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