The Mortgage Fallout – A Light at the End of the Tunnel

Eric Bramlett
October 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!)

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Investment Property
December 5, 2007

Lets hope your optimism for improvement comes true quick.

I am based in the UK and it looks like we are about to follow the US and the downturn is about to kick off “properly” following the US troubles. The sub prime lenders have just started closing their doors and a lot of major lenders have tightened up landing to investors for properties, unless your history is watertight.

This is recipe for troubles ahead, as less people get approved, the less the sales and lower the prices go. Combine this with a headline news that was announced yesterday that troubled times are ahead (announced by the Financial Authority here) means that we will be joining the US downturn soon. Here’s holding on tight…

Eric Bramlett
December 5, 2007

Yeah…unfortunately, what I predicted on this post didn’t come through. It doesn’t look like the FHA max will be raised to $417k. The market has seemed to flatten out, however, and isn’t worsening. Experts are predicting early 2009 before it’s completely stable. Will make for an interesting 2008!

adverse credit mortgage
June 20, 2008

Eric

I recently came across a property market analysis on the CNN website (should still be there in the money section). It reckons that most of the states in the US will see a bottoming of poperty prices in 2009/ 2010, so theres more troubled times ahead. They predicted further price falls in states like Florida of 10%

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