Many people were happy to close the books on 2011. But while the year is gone, its impacts on the housing market will continue well into 2012 and possibly longer. Here is a recap of five 2011 events that homeowners in Denver and across the country will need to keep an eye on.
Robo-Signing Reverberations – In 2010, some banks were accused of approving foreclosures without proper or complete documentation. In 2011, potential lawsuits made banks slow or stop their foreclosure processes, leaving affected homeowners hanging in limbo. It’s expected that settlements will begin in 2012, with a potentially large number of foreclosures to follow.
Budget Deficit and Debt Ceiling Debates – This one was hard to miss even if you’re not a Washington-watcher. While nothing major was really accomplished in 2011, this year could be different. Both parties agreed that more income could be gained by reducing tax deductions on things like mortgage interest. If you own a high-income property in Denver, this will cost you a lot more in taxes if it passes in 2012.
Home Affordable Refinance Program (HARP) – Under this program, homeowners seriously underwater on their mortgages would be able to refinance—if they were current on their mortgage payments. However since most underwater homeowners are behind on their payments, they won’t qualify for a loan modification. Critics say this is just a way to stimulate the economy without Congress having to create its own plan, which they probably couldn’t do anyway.
Flood Insurance Woes – Ever since Hurricane Katrina, the National Flood Insurance Program (NFIP) has been struggling under massive debt. As a result, their insurance premiums don’t fully cover current disaster claims. Flood insurance through NFIP is the only way to get a mortgage in a flood-prone area; if NFIP collapses from debt, home construction in Denver and other flood plains would stop indefinitely. The program has received funding through May 2012, but it’s unclear what will happen after that.
Lower Conforming Loan Limits – In October 2011, upper loan limits were reduced for mortgages with Fannie Mae, Freddie Mac or the Federal Housing Administration. This was done to reduce the number of loans that qualify for federal backing and in theory make the housing market less dependent on the federal government. But in November 2011, the limit was pushed back up for FHA loans and in 2012 Fannie and Freddie may follow, bringing us back to square one.
Despite the information above, there are still many hopes for what 2012 will bring for the housing market and the overall economy. What’s important is to be aware of issues that could have a negative impact and then take the proper precautions. As the saying goes, knowledge is power.
Let the professionals at the Bandy Team help you buy or sell a Denver home, contact us for a no-obligation consultation. If you’re thinking about buying a home in Denver, we can show you some terrific properties in Denver, including homes in Denver Highlands and real estate in Washington Park (also known as Wash Park). You may also be interested in horse property in Franktown or homes in Parker, including a wide variety of homes in Canterberry and real estate in Stonegate.
Marianne Bandy
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