The Mortgage Fallout – A Light at the End of the Tunnel
, Oct 17, 2007
Let me preface this by saying that we (Austin) are in one of the best real estate markets in the United States. People are still buying & homes are still selling – but DOM (days on market) is a little longer. The only market to remain relatively untouched by the mortgage fallout is the super-high end market ($3m+). Unfortunately, that’s not my market (at least not this year.) With that said – we have been affected. The mortgage fallout seemed to coincide w/ the seasonal slow-down this year, so it just seems like it’s a much slower holiday season.
I’ve said all along that we should see some relief by around February/March…it won’t get back to the crazy days of “anyone can buy a house,” but the pendulum will start swinging back in the right direction.
So…the point of this blog…I received a forwarded email from an LO that was extremely encouraging. A representative from her bank met w/ the director of FHA, who was extremely optimistic about raising the cap of FHA loans to $417k by the end of December.
This is huge. There are many people who are completely unqualifiable (even in sub-prime) or who are sub-prime (and would receive a hideous rate) who can qualify for FHA. The only hitch is that they just removed DPA’s, but we can still get an FHA in with 2.25% down, and no closing costs. Let me say this: If you can’t come up w/ 2.25% then you have no business buying a $400k home!!!
Let’s just say that I will definitely begin actively marketing FHA loans as soon as the cap is listed (and I’ll go ahead and start preparing now!)