NEW YORK (CNNMoney) — The mortgage market appears to finally be stabilizing — as long as you ignore loans backed by the Federal Housing Administration.
Increasingly, FHA-insured loans are falling into foreclosure or serious delinquency, moving in the opposite direction of loans guaranteed by Fannie Mae and Freddie Mac or those held by banks, which are all showing signs of improvement.
And taxpayers could ultimately be on the hook for FHA’s growing number of troubled mortgages. The agency’s finances are already on shaky ground, and additional losses from loans going sour could prompt the need for a federal bailout, experts said.
@streetmoney21
Do you know the reasoning behind FHA loans defaulting??
Are they based off pre-2008 interest levels?
Also on a side note, what are banks doing about their “shadow inventory”? Are they planning on selling it soon or keeping it off the market?
Thank you and love the youtube vids man!
-Ro
A weak job market with high under employment and unemployment continues to put financial strain on families across the country. In addition, many people are not eligible to refinance their mortgage because they simply do not qualify. Lending standards are strict so it is really hard to get a loan. As for shadow inventory, the banks continue to sit on a lot of properties and it is taking on average 31 months to foreclose on a property. With that being said, over 1.5 million homes are waiting to be foreclosed on in addition to the 9 million or so homes in shadow inventory. In my opinion I believe the banks will continue to with hold properties for years to come in order to prop up the market.
SM21
I wonder what will ultimately happen to these houses in shadow inventory. It’s not as if a home can up-keep itself. Houses take a lot of maintenance. Certainly the longer the banks hold the homes off the market, the less the properties will be worth. I imagine some properties may become almost worthless if basic weatherization and protective measures weren’t taken before the homes were left abandoned.
Banks are letting people stay in their homes for years without making a mortgage payment for the very reason you are talking about. If they let people camp out they will most likely take care of the property and the bank does not have to pay the tab. Make no mistake, this concern has high visibility see here: http://www.usatoday.com/money/economy/housing/story/2012-08-09/Foreclosure-rates/56905358/1
We will be in this situation for many years to come.