 Buyers Tips
Big Banks Are
Beginning To Thaw Citigroup appears to be ready to lend again as the recovery gains traction. In January 2009, badly burned Citigroup was scaling back its home lending business. Just one year ago, its home mortgage business was placed in its bad bank entity to be sold or ignored.Today, it intends to increase its purchase of home mortgages and keep more loans on its books. Especially strong news because its takes place just as the Fed announced that it would return to more-normal emergency loans. Signaling that big banks are healthier and no longer need extraordinary lending practices. Many of the large banks have surplus capital now and can self fund as necessary. Other big banks, responsible for 60% of all mortgage loans before the crises, cant be far behind. Regional Banks Not Why? The rate at which property owners are defaulting on loans is startling. As commercial loans go bad, the regional banks are particularly hard hit. Their main customers are small and medium-size businesses including many developers. The Regional banks are getting stuck with the keys to shopping malls, hotels and office and apartment buildings at an alarming rate. More than $2 trillion in commercial mortgages are expected to come due between now and 2013. It's the smaller banks, that stepped up lending to local developers and businesses. I cant imagine the regionals having much appetite for real estate loans with all that those developers looking to refi between now and 2012. Rates Will Be Rising Because the Fed will exit the mortgage security markets shortly, the reasonable expectation is the money will become more costly. Its more important than ever to locate additional loan sources. Government Home Loan Programs A large percentage of loans for new purchases will be from non-traditional funding sources like such as VA and FHA programs. The Government is stepping away from extraordinary help for the large institutions and major player in the secondary mortgage markets. Big banks have paid back TARP loans and the mortgage bundles the Fed bought as lender of last resort have become very profitable. Obama is expected to use this money to help the real estate markets. Look for more Govt programs to help buyers soak up the surplus inventory, as the focus becomes stabilization of the real estate market. The following is a short list of Government programs that may help lower cost through insurance or provide new avenues for funding your clients purchase. I just wish it was a larger list... Loan Sources Govenrment Insurance Aids Borrowers Basic FHA Loan Condominium Unit Purchase (Mortgage Insurance - HUD/FHA) Manufactured Home Loan Insurance (HUD/FHA) Mortgage Insurance: Purchase of a Cooperative Housing Unit VA - Home Loans - Interest Rate Reduction Refinancing Loan American Dream Downpayment Initiative REsourced from www.yourpropertypath.com You may republish this article, as long as you do not edit and you agree to preserve all links to the author and www.yourpropertypath.com
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