First off before I get in to the foreclosure news, I thought I should share some pictures of this bull! I received it in an email the other day and it says it is the new Colorado state record P&Y bull. Scores 459”. Private land, but not high fenced… Not sure if it's on here already or not - Enjoy!
The Foreclosure Crunch... As some of you may know, FHA loans are what are quite possibly considered the “safest” home loan out there. Being backed by the government and only needing 3.5% down, it is very appealing to the lurking home buyer. During 2010 foreclosures on Federal Housing Administration-insured loans spiked by more than 40% in the fiscal year 2010. Some of you may be wondering exactly how much money banks are losing on foreclosures… On just FHA foreclosures alone, banks averaged a loss of $76,000 per foreclosure! While that may not seem like a ton to some, FHA acquired 98,350 foreclosures at an acquisition cost of $11.4 billion dollars. They sold 87,700 units for $5.7 billion. That creating the average loss of $76,000 on each sale compared to the average loss of $70,600 in 2009.
Most of the FHA loans foreclosed upon were originated during the height of the housing boom and do not reflect recent FHA purchases. The average size of an FHA-insured loan originated in 2010 was $175,000. (These figures, which reflect results for the year ending Sept. 30th, recently appeared on HUD’s website as part of an annual report released by the agency.)
Although this is negative news and not something we all want to stand on for future recovery in the housing market, Depart of Housing and Urban Development officials said the government insurer’s losses on REO properties “are in line with industry’s losses in today’s market.”
More Indsutry News... Mortgage rates have jumped from the 50 year lows over the past several months and are now hovering in the high 4’s on 30 year rates and the low 4’s on 15 year rates. While these are still EXTREMELY attractive rates, we are not going to see them last forever. It is proposed by the end of 2011 rates will be anywhere from 5.5% - 6%. My suggestion is for those of you who are considering refinancing at this moment, jump on board and find out what your options are! Also, for those of you who are considering purchasing a new home and you are wondering if home values are going to drop even further, watch this week’s mortgage video we produce here in my office and look at the difference in payment numbers from a 5% lower purchase price, but an increase in interest rate over the next year… You will pay more in the long run than letting values drop any further!
I just wanted to provide you with some up to date industry news and something to think about.
Have a great weekend!
