Real Estate Market News Update
12/16/10
New support for neighborhoods with high foreclosure rates was announced Wednesday as Federal Reserve, FDIC, Office of the Comptroller of the Currency, and the Office of Thrift Supervision officials issue final ruling. Through HUD's Neighorbhood Stabilization Program (NSP) additional funding to purchase and rehab foreclosed properties has been made available. The changes encourage banks to provide services for NSP communities. In exchange, lenders will acquire credits that will be considered when lenders request approval of applications for new bank branches or for mergers or acquisitions. HUD's NSP program has received over $7 billion in funding to alleviate problems such as large inventories of vacant homes, declining property values and neighborhood destabilization resulting from the financial crisis.
RealtyTrac reports that foreclosures have fallen to the lowest level since November 2008 as a result of the robo-signing delays. Nationwide, foreclosure filings dropped 21% from the previous month in November. Typically, the winter months see a drop of 7-10% in foreclosure activity. Lenders still foreclosed on roughly 67,000 homes in November and filed almost 79,000 notices of default.
New mortgage application fell for the 5th straight week as rates continue to rise. Wells Fargo's 30 year conventional fixed rate mortgage was listed at 5.25%. The lowest rate, the 5/1 FHA ARM rose to 3.25% form 2.75% a few weeks ago. Increases in interest rates will add additional pressure to the already weak real estate mortgage as buyers will find monthly payments rising as well. Despite Federal Reserve policy, maintaining 0-.25% on the Federal Funds Rate and a pledge to continue purchasing Treasuries, rates climbed higher on news that lower tax rates could be extended for another two years, boosting growth prospects.
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Information previously posted to www.placesinplainfield.com/new_blog.html
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