OVERVIEW OF FORECLOSURE FILINGS
With mortgage rates steadily on the rise, the housing market is going to decline. Never mind the fact that foreclosure rates are increasing. Across the country, foreclosures were up 4.4%, and up 48.3% when compared to last year. Just in May alone, there was one foreclosure filing for every 483 American households. You can find out more by reading the real estate news. Part of the American dream is to be a homeowner. But thanks to unsavory lending practices by many lending companies, your dream may now turn into a nightmare.
Housing market experts agree that this is hitting the Midwest, Southwest and West Coast hardest. Just read any real estate news paper to find more about that as well as foreclosure rates.
There are few factors that contribute to this problem. First, many borrowers become over extended and thus become unable to afford their homes. Second, bad lending practices have led to many more people loosing their homes. Everything from low down payments, no down payments or low initial interest rates that eventually balloon into unaffordable ones. No wonder the foreclosure rates are so high. Read all about it in a real estate news paper.
MORE INFORMATION ON FORECLOSURES
Another important factor in the high foreclosure rates are adjustable rate mortgages, or ARMs. You can read about ARMs in your local real estate news paper.
Unfortunately, theses loans account for almost one in every four mortgages. According to the Mortgage Bank Association, the majority of these loans are taken out by people with bad credit. And when the ARMs rate goes up, these people may not be able to afford the rates. Look it up in any real estate news paper. Then, when they loose their home, the foreclosure rates continue to rise. It is headline news in any real estate news magazine.
MORTGAGES ARE MORE EXPENSIVE
While reading the real estate news and information about foreclosure rates, don t forget to look into Freddie Mac and Fannie Mae. What you read in the real estate news paper is not good news.
With high foreclosure rates, these lending companies are going to administer fees as part of their loans in order to better protect them from the slumping housing market. These fees will be a 0.25% of the total loan. Read more about it in the real estate news. So now borrowers will have to pay more for their loans. If a borrower does not agree to this fee, then the lender will charge them a higher interest rate, again making your mortgage more expensive.
MORE ABOUT FANNIE MAE AND FREDDIE MAC
These companies are also going to add pricing adjustments that will be applied only to borrowers with credit scores of 680 or less. In turn, it will cost them more to pay for their homes. You ca read more about this and higher foreclosure rates in any real estate news magazine. Fannie Mae has recently announced that they will be reducing their allowable financing by around 5% in markets they deem to be declining. Also, areas with high foreclosure rates are in that list.