Foreclosures Helping Many To Realise Dreams

Posted in Foreclosures, November 21st, 2007 |

With the real estate market being at an all time low many low and middle income groups are getting an opportunity to become house owners. Houses that were once priced at $450,000 are now available for $300,000. For many – dreams are becoming realities.

The sheer numbers of foreclosed houses are beginning to tell on the market. The last few years (2000-2005) had seen an abnormal boom in housing but with this fall a sense of stabilization has returned.

But other analysts do not think the same way. They fear that the price slump might cause speculators to snap up many foreclosed units and change them into rentals. This will result in another bout of price rise. To cut off that possibility the local task force in San Diego County is thinking of setting up a regional bank that would buy the foreclosed houses and give the needy a chance to buy or rent. It will encourage both public and private financing for development of the neighbourhood.

The best bargains for the new buyers are in the low-income regions like City Heights. Many foreclosed units are lying around waiting to be joined by many others. It is not just the buyers but renters too can make hay while the sun, for them, is shining. Banks are eager for deals.
Words of caution are being repeated so that the new buyers do not repeat the same mistakes as the previous owners. The thumb rule is not to borrow than what one cannot repay. This way one will be able to sleep well without nightmares. The best way is to try to get a pre-approved loan by working in tandem with housing counselors appointed by HUD. Loans that are less than $417,000 and purchased by Freddie Mac and Fannie Mae (govt. sponsored) remain at a record all time low. To make foreclosed properties available and affordable to the low-income group is no easy matter. It requires multi-layered steps in loan transaction involving various down payment help programmes.

There is a fear that prices may go down further. Interest rates may also climb high. There is no guarantee. Abandoned houses are creating problems for entire neighbourhoods and it is to the interest of all that these units are quickly occupied. The sign of children playing in the garden is a sign of health for the entire society.