A number of leading banks, as well as federally-chartered mortgage giants Fannie Mae and Freddie Mac, have announced another moratorium on new foreclosures.
This is something we have several times since the end of last year, with different banks and servicers announcing a halt to foreclosures while waiting to see how the government pledges to address homeowners who are delinquent on their loans.
Whether it’s the government stepping in and buying “bad” loans, incentivizing workouts and short sales for lenders, or offering more bailout funds for banks that comply with the government’s mortgage lending and servicing guidelines, many banks have decided that foreclosing and selling homes for 70 cents on the dollar may not be the most cost effective approach.
We have already seen a significant drawdown of inventory over the past few months, with sales spiking by nearly 50% in California during December as buyers rolled back into the market to take advantage of the new affordability.
This is something we have several times since the end of last year, with different banks and servicers announcing a halt to foreclosures while waiting to see how the government pledges to address homeowners who are delinquent on their loans.
Whether it’s the government stepping in and buying “bad” loans, incentivizing workouts and short sales for lenders, or offering more bailout funds for banks that comply with the government’s mortgage lending and servicing guidelines, many banks have decided that foreclosing and selling homes for 70 cents on the dollar may not be the most cost effective approach.
We have already seen a significant drawdown of inventory over the past few months, with sales spiking by nearly 50% in California during December as buyers rolled back into the market to take advantage of the new affordability.
With an $8,000 federal tax credit to help first-time buyers now part of the equation, competition figures to only intensify among buyers at the entry level price points in our market.
It will be interesting to see how this plays out… as many banks seem to be playing a game of “wait and see” with the federal government, holding out for the best deal possible on their distressed assets.
