Waiting for foreclosures to buy?
Stop waiting they won’t be happening, at least not in the amounts many people thought they would happen. I am writing this blog to share some of the facts that are contributing toward homeowners being able to avoid foreclosure keep their homes or sale them and still make gains during or after the pandemic.
We must thank the previous housing market fall during 2008 through 2010. We learned that the financing industry needed stronger rules and regulations. July 21st, 2010, The Dodd Frank Wall Street Reform was enacted. The act requires annual tests to big financial institutions to determine if they are prepared for the inevitable arrival or rescissions and future financial crises. (Forbes Advisor July 20th, 2020) Let’s see how well this law prepared us for a pandemic.
Of all the new regulatory bodies created by Dodd-Frank the most highly profile and notable one is the Consumer financial protect bureau. It is intended to protect consumers and enforce law against discrimination in consumer financing (Forbes advisor July 20th, 2020) But what does it mean? Well, it means now borrowers are presented with multiples disclosures showing interests rates that are fixed instead of adjustable rates. First time home buyers are protected with classes to help them budget for expenses on homes and how to hold agents and lenders accountable during the process. All this to arrive to an important place the beginning of 2020 when the pandemic arrived and shook the world. Some homeowners found themselves without jobs and without savings, but this is how most of them avoided losing their homes during this crisis:
1.The banks offered what is call forbearance or a deferment of mortgage payments that right now have been resolved in adding that debt to the principal mortgage amount or negotiated in payments or in just few cases the homeowner has had to list the home for sale and still make money in most cases.
2.The Dodd-Frank measures contribute effectively to the housing industry in such a way that when the pandemic arrived 60% on homeowners in USA had at least $177,000 dollars in equity, this was a blessing.
3.The government postponed foreclosures for a longer period.
4.Directly COVID changed the mentality of renters, now more renters are trying to buy a home. Also, current property owners are looking at buying a second home or a rental.
5.Low interest Low – interest rates have created a high demand, those who couldn’t qualify in the past now have an opportunity to do so thanks to this – these low rates.
I can talk about more factors, but the ones here explained will give you a pretty good idea of why we won’t be seeing to many foreclosures this time around.
Hablemos claro con Diana & Team Altitude Denver Colorado 720-297-1368.