June, 2013 | Nevada County

Home for sale cheap, might need a little paint. Photo credit: http://funnychill.com/ — Home for sale cheap, might need a little paint.
Photo credit: http://funnychill.com/

Foreclosures have been falling in recent months, but two government watchdogs warn that the foreclosure crisis isn’t over yet. About 1.7 million borrowers have missed more than one payment on their government-backed mortgages, according to a newly released report by the inspectors general of the Federal Housing Finance Agency and Department of Housing and Urban Development.

The shadow inventory is made up of loans that have been delinquent for at least 90 days. If these delinquent loans become foreclosures, they could pose significant financial challenges to mortgage giants Fannie Mae, Freddie Mac, or other federal housing agencies, the report notes.

“Not only are current REO inventory levels elevated … they may rise over the next several years depending on the number of shadow inventory properties that are ultimately foreclosed on,” the report stated.

According to the report, the shadow inventory is more than seven times the inventory of REOs that Fannie Mae, Freddie Mac, and HUD currently own.

“Even a fraction of the shadow inventory falling into foreclosure could considerably swell … inventories of REO properties,” the report notes.

Source: “‘Shadow’ homes could burden U.S. housing agencies: report,” Reuters (May 31, 2013)

Distressed homes lure cash investors

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Skyrocketing home prices in a few markets have some analysts concerned that prices are on the rise too fast and could ultimately hamper the housing recovery.

“In many markets, fundamentals are improving as unemployment rates continue declining, while low prices and low interest rates have affordability high,” according to analysts for Fitch Ratings, a credit rating agency. “However, especially in cities that never fully unwound the mid-2000s bubble, rapidly increasing price levels are a potential cause for concern.”

Many of the areas of concern are in California, where home prices have posted gains of 13 percent in the past year alone, according to analysts.

Limited housing inventories of for-sale homes mixed with rising buyer demand are mostly behind the rising home prices.

“We believe this level of housing demand is likely to abate once the pent-up demand is satisfied,” Fitch analysts said. “The supply is also artificially low, as recent regulations have limited the pace of foreclosure sales and the large percentage of underwater borrowers continues to hope for future price increases to be able to sell their homes at a profit.”

Source: “A new bubble forecasted in key real estate markets,” HousingWire (May 29, 2013)

For all your real estate needs
Email or call today:

John J. O’Dell Realtor® GRI
O’Dell Realty
(530) 263-1091
Email John

DRE#00669941

Nevada County

Monthly Archives: June 2013

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