Top Three Issues that impacted the real estate market:
1. The Robo-Signing Scandal
Breaking out in October 2010, the scandal accusing banks of approving numerous foreclosures without proper reviews continued into 2011. Banks were forced to slow their foreclosure processes down, making sure to take extra precautions. 2012 is predicted to bring a quickened pace of the foreclosure process.
2. Natural Disasters
Tornados, floods, and hurricanes brought an increased onslaught of insurance claims and insurance requirements. For home owners living in flood-prone areas, “you can’t get a mortgage if you don’t have flood insurance,” the Time magazine article notes.
3. Conforming Loan Limits
The government lowered the conforming loan limit for loans backed by Fannie Mae and Freddie Mac as well as those covered by the Federal Housing Administration from $729,750 to $625,500 in most areas. In November, being urged by the real estate industry, the government raised the loan limits back up for FHA loans, leaving out the Fannie and Freddie loans.
“Mortgage lenders are willing to charge lower rates for loans that are backed by Fannie or Freddie; with a lower conforming loan limit, a small number of loans that used to qualify for federal backing no longer do.”
Source: “5 Events That Really Mattered for Housing in 2011 -- and Beyond,” Time Magazine (Dec. 29, 2011)
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