RENTS EXPECTED TO RISE BUT NOT IMMEDIATELY-ST.CLOUD KISSIMMEE FLORIDA INVESTMENT PROPERTIES IN SHORT SUPPLY. The scrutiny of shoddy lending practices and closer examination of lenders who have have improperly foreclosed on delinquent borrowers has had a major impact on the amount of available"potential rental" properties in the Kissimmee St Cloud Florida housing market.
Smaller homes, attract investors who are looking to capitalize on bank held properties, have seen the number of units available greatly diminish as numerous investigations were conducted by the Department of Housing and Urban Development's inspector general. Bank of America, JP Morgan, Chase, Wells Fargo, Citigroup and Ally Financial were all under scrutiny. Audits have been ongoing to establish if any of the major lenders have violated the False Claims Act (which dates back to the Civil War Era) and HUD has referred its finding of the audit which were conducted between February and March 2011.
The Department of Justice will now review the finding and determine if charges should be filed against the lenders for violations uncovered during the lender audits. Some banks allegedly filed for Federal Reimbursement on foreclosed homes using flawed documents.
Allegations of shoddy business practices and illegal foreclosure filings have results in dialog between Attorney Generals from all 50 states and teams of attorneys, HUD, The Treasury Department, the Justice Department and the Federal Trade Commission with the five lenders who handle 60% of home loans (3 out of 5). This could potentially result in a settlement estimated in the billions of dollars for the major lenders to set up a fund to help distressed borrowers.
While improvements have been made in the short sale processes and a slow down of foreclosures has occurred 2million filings this year compared to 2.9 million filings last year-the mortgage mess is far from over.
Investors typically look for distressed properties which require minimal repairs to be made market ready as rentals in many cases. With the number of defaulting borrowers on the rise it is estimated this will apply increased demand in the rental sector of the housing market. Curtailing the inventory of foreclosed homes available for resale, has caused prices of available homes to rise slightly.
Combined with program cuts affecting vendors involved with the Neighborhood Stabilization Program eligible homes; the thrust of rehabbing short sale and foreclosed properties is shifting more towards the private sector investors.
Yet lenders are still adding conditions of sales, which thwart investors from buying immediately when a potential "rental suitable property" hits the market. If no other offers are presented within the first 15 days; they will typically drop the condition that the home be the primary residence; as opposed to dropping the price, which would make the properties more attractive to investors who will have to make needed repairs. First time home buyers conversely, are looking for turn key ready homes.
Rental home demand is expected to continue to grow; as borrowers who may have been former homeowners seek alternative housing. Additionally, buyers who may not qualify under tightened lending requirements may be forced to stay in the rental market longer than they had hoped to.
Once the release of the estimated 5 year inventories of already foreclosed homes begin to trickle into the market, prices will remain affordable. Combined with low mortgage interest rates may open the door for even more potential investors to re-enter the housing market...this time as landlords.
The median price on rental homes that are 3 bedroom 2 bath is $950- it is finding a tenant without credit issues that is challenging.
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