Real Estate Investing News

In the future, losing a home because of illness or job loss will be seen differently than choosing to abandon a mortgage obligation for other reasons, says mortgage lenders. According to Bill Merrell of the National Association of Review Appraisers and Mortgage Underwriters, if you made a strategic decision to default on paying your mortgage, it will work against you.

Jay Brinkmann, chief economist for the Mortgage Bankers Association says that it will probably be seven or eight years before walkaways are able to buy another home. “Credit scores are only one component of a complete credit decision,” he says. “[In these cases] credit scores are not a good indicator of their willingness to continue to pay their mortgage, “ he added.

US mortgage rates have been pushed lower and lower following Europe’s financial problems. Investors are putting their money into U.S. government securities, driving mortgage rates down near record lows as international investors see the U.S. as in much better shape than Europe.

Even though some in the industry warn that this may come with lots of volatility as investors jump in and out of the market, some predict that rates could be as low as 4.5 percent this summer. Since the Federal Reserve stopped buying mortgage securities, many experts were predicting that rates were likely to rise to at least 6 percent by this fall.

According to MacroMarkets, which surveyed more than 100 analysts and market strategists, the housing prices are expected to increase 12.4 percent between 2010 and the end of 2014. However, those didn’t all see the housing market in the same light. Joseph LaVorgna, an economist at Deutsche Bank predicts that home prices will rise 37 percent by the end of 2014.

On the most bearish end, both Anthony Sanders, professor of real estate finance at George Mason University, and investment adviser Gary Shilling, president of A.Gary Shilling & Co., expect prices will decline 18 percent.