One of the four economic factors to watch in your local markets is the availability of mortgages for home refinancing. ?With interest rates at their lowest levels in 40 years one would imagine that the major lenders would be very busy right now with refinancing home loans.? And, if loans were being made available to all qualified refinance borrowers it would certainly help our nation?s economy.? Well, the truth in the world of refinancing tight mortgage-lending standards and dramatic declines in home prices prevented about 2.3 million U.S. homeowners from refinancing last year, and it will be even higher numbers for 2011.
The biggest issue is home values have declined which has left millions owning more on their home than it is worth.? Here is a dramatic example.? At the end of June 2011 there were 23% of all mortgage holders with properties worth less than their mortgage ? 10.9 million borrowers! ? statistics from CoreLogic.? In addition there are 2.4 million with less than 5% equity in their homes.? So, with the values of homes down and the very strict underwriting guidelines of lenders it is very difficult to refinance a home, in spite of the record low interest rates.
Because of lenders strict guidelines and other factors there were only 7.9 million home mortgages funded in 2010; refinance, home purchases and other property loans.? In 2009 there were 9 million home mortgages funded. ?That is compared to 21.5 million in 2003!? In addition, the Federal Housing Administration is lowering the maximum loans backed by government controlled mortgage companies today, October 1st.? This will move the conforming loan limit from $729,750 in the East Bay to $625,500.? This will force home Buyers to come up with higher down payments in order to qualify for a conforming loan limit.? This will also result in less mortgages being funded.
An additional BIG factor is still the issue of foreclosures - the ?new normal?. Nationally there are 54.9 million mortgages.? 4.5 million of them are not performing loans!? The really big number is there are an additional 10.4 million mortgage holders who are identified as likely to default, says Laurie S. Goodman ? Amherst Securities Group.
Yes, all real estate is local and the neighborhood you are currently in may be one of the Bay Area?s best performing regarding values and sales.? And, we can?t ignore the impact that these realities are having on all of us.? CONTACT ME TODAY for a free home value analysis.? Glad to help.? Until next time?Jim Walberg
Related posts:
- East Bay Real Estate: Impact Of Lowering Conforming Loan Limits October 1st!
- East Bay Real Estate: Painful Changes Ahead For Home Buyers!
- East Bay Real Estate: The Housing Crisis & It?s Impact On Families
Filed Under: Blog, Buyers, Featured Posts, News, Real Estate, Sellers
Tagged: Amherst Securities Group, Conforming Loan Limits Lowered, CoreLogic, east bay real estate, Federal Housing Administration, Jim Walberg
Source: http://www.eastbayrealestate.com/sellers/east-bay-real-estate-home-loan-refinance-crisis-difficult-to-get-a-loan/
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