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Continued residential financing improvement expected across country

Posted on Monday, April 21, 2014 at 10:46:45 AM

Over the past decade, a number of homeowners have encountered problems making their mortgage payments, thus falling behind and ending up categorized as "seriously underwater." An abundance of these borrowers is bad news for the economy and the housing market, but a reversal of trends and other positive factors has helped to bring more people above the surface once more.

Historically, many homeowners across the country run into problems with their home's value and their monthly mortgage payments all the time. According to RealtyTrac, however, recent information indicates that first quarter of 2014's foreclosure and negative equity numbers have actually improved, reaching a new low since reporting on this topic began in 2012. Only 17 percent of all U.S. properties were considered seriously underwater during that time, down from 26 percent noted one year ago. 

Even so, some problems have emerged, RealtyTrac explained. While the overall foreclosure numbers are trending positively, there are many people entering the process with a high amount of equity. This is interesting because that financial situation often presents opportunities to dodge a foreclosure or short sale.

"The relatively high percentage of foreclosures with equity is surprising to many because it would seem homeowners with equity could easily avoid foreclosure by leveraging that equity by refinancing or with an equity sale of the home," said Daren Blomquist, vice president at RealtyTrac. "But many distressed homeowners with equity may not realize they have equity and in some cases have vacated the property already, assuming that foreclosure is inevitable."

Recovery expected to continue
Most importantly for the U.S. housing market are the expectations that the recovery will continue. The decreasing amount of foreclosures and borrowers behind on their residential financing payments are good news, and these trends are predicted to remain for all of 2014.

This is based on information from LoanLove.com's recent foreclosure guide. The news and loan advice website noted that fewer homes should end up in the foreclosure process this year, thanks in part to the market's steady recovery. As a result, there could be an increase in equity for all homeowners across the country. Rising home values will lead to increased buying and selling activity, but might eventually contribute to declining home prices.

While a more stable housing market means fewer affordable foreclosures and short sales out there for prospective buyers, there are still opportunities to be had, LoanLove.com explained. 

Home Loan Investment Bank is a full-service financial institution offering competitive residential financing rates and a host of other lending and banking solutions. If you are interested in purchasing a home this year, give us a call today to talk about your financial needs.