Hey, is that a pig I see flying by? Lots of news the last few weeks in regards to things that many people told me would NEVER happen. First it is HARPII letting people refinance their homes even if they are upside down. Then BofA announces they are going to be dropping hundreds of thousands of dollars off the principal for some lucky homeowners. And now, I’ve heard that investors that are under-water on their rental properties may be getting some help from the federal government. Investors may be able to get up to four loans modified starting in May under the new HAMP rules. The Treasury Department will be giving incentives to banks to lower interest rates, extend the terms, or even cut the principal balance. The investor must promise to rent the homes out if not rented already.
For a long time there has been intense resistance to help investors because many people believe investors helped drive the bubble up further than it should have. There is also the idea that the investors were taking a calculated risk in order to get a financial gain, so they should bear any of the downside risk. But those thoughts are now being overruled by other concerns. First there is the plight of innocent tenants getting evicted after the investor defaults, or the row after row of vacant homes dragging property values down. It’s to the point where now the government is thinking that vacant, blighted homes are a problem, no matter HOW they got to that point. They are thinking that cleaning up the mess will be good for everyone in the long run.
At the peak of the bubble, in some parts of California 30-40% of all home sales were investment purchases. Right now a little more than 20% of homes in foreclosure are to investors.
If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty