Say “I’m a Realtor(R),” these days and most folks in Michigan will look at you with sympathy. The response is typically, [low whistle], “Wow, so um, how are things this year?” Here in the Ann Arbor real estate market Team366 has not only kept our heads above water, we’ve doubled our business this year!
One of the reasons we’ve been able to increase our business is our ability to advise clients. A recent re-posting of a subprime mortgage post from a year and a half ago seems darn near prophetic. The post ends with these two lines:
This subprime implosion will force lenders to ensure their buyers have good credit and good documentation to back up a mortgage. This all translates into a tightening of the underwriting requirements and a “liquidity constriction.” [ed. emphasis added]
And what have we seen this year?
The tightening of lending standards, the tightening of the purse strings of the banks, and a general unwillingness to move the real estate ball forward until SOMETHING shakes loose.
On the heels of reposting that article, the RSS reader threw out another gem of an article from this past weekend about loan modifications.
Is this that something?
Loan modifications could be the answer to many homeowner’s problems. But is this the answer to our current housing debacle? Does renegotiating the monthly payment and/or interest rate on a mortgage ensure that the housing market slows its decline more quickly? Does this simply delay a bottom to the market? Is it a false bottom?
This author believes that if the terms of a mortgage CAN be changed, that it goes a long way to easing homeowner anxiety. It will definitely assist in keeping families in their homes. As pointed out in the article, the current loan
modification programs that the FDIC is currently utilizing simply defer principal amounts and allow rate modifications to slowly snap back to the original over 5 years.