Are Mortgages Going To Be Easier To Get In 2013?
Are Mortgages Going To Be Easier To Get In 2013? This is housing’s bazillion dollar question right now.
The US Government has poured Millions, Billions, Trillions (we lose count after a while) into the US economy to produce the growth and recovery we are seeing today. By end of 2012 the good news for housing was as follows:
- Sales were up 21%
- Inventories were down 20%
- Prices finally increased by an average of 1%
- New Building Permits up 30% (builders are building again!)
- Home Equity Loan Volume Jumped Up 30% - this is huge.
This shows a small price increase but at least prices are going the right way. Inventories down 20% is partly the result of banks holding back on issuing new foreclosure notices and seem to accept that many underwater occupiers are “squatting” in their homes. Whether that is a good thing or not varies by house but that is another subject matter. The tight inventory has contributed to a higher level of new builds pending and in progress.
Nothing is ever clear cut and in 2013 some cities are still buyers markets however some areas have become seller’s markets again. On a general note many optimists forecast that prices could rise between 5% - 10% in 2013. Also the trend in home equity loans is likely to continue and is forecast to hit $104 billion in 2013.
That’s the good news so far especially for cash buyers, investors and home-buyers already paying a mortgage and managing to keep their heads above water. But what about those of us, especially first time buyers who would like to buy a property financed with a mortgage? While the government has attempted to stimulate the economy to make it recover, they could be shooting themselves in the foot by their “Consumer Financial Protection Bureau”. With the introduction of a minefield of legislation intended to protect borrowers, as we have seen time and time again, this is not always a good thing and usually opens up one if not several new cans of worms. There is a new document issued in January 2013 of about 3,081 pages and there is plenty more in the pipeline coming from the CFPB. It will be interesting to see how many people actually know ‘what’s in there’. However I will stay focused. Some metrics I have learned about in this document include:
- Qualified Mortgage Rules - 804 pages
- Mortgage Servicing Rules- 753 pages
- High Cost Mortgage Appraisal Rules - 311 pages
- Appraisal Disclosure Rules - 125 pages
- High-Cost Mortgage Counseling Rules - 431 pages
- Escrow rules - 116 pages
- Rule against steering borrowers to higher cost loans - 541 pages
I have met with and worked for several loan officers and I know that collectively, they are not likely going to be jumping up and down with joy on yet more rules and changes to learn. A little here and there is okay however this could be substantial. Time will tell and of course, everyone's situation is different when applying for a loan so the degree of impact is certainly varied. However with so much legislation, banks and other lenders are sure to be cautious about sanctioning new mortgages in 2013 so getting a new mortgage may not be easier in 2013. In the end, supply and demand will likely still rule the day. And if enough individuals are determined to borrow money to buy a home, then they will surely find the way to do what it takes to make it happen so the lenders will lend to them. And we hope they succeed for the betterment of all! Interesting year ahead to stay tuned…