Foreclosures At A Five Year Low: How This May Help You Refinance

Since the housing market crisis of the mid-2000s, borrowers in foreclosure-distressed neighborhoods have watched property values plummet. When a home is foreclosed upon in a neighborhood, it may stand vacant for months, or in some cases even years. This definitely lowers the property values of the homes surrounding it; when a neighborhood experiences multiple foreclosures, the problem can grow even worse.

This is bad news for anyone who wants to do a cash-out refinance, home equity loan, or a reverse mortgage. Seniors hoping to take advantage of the FHA’s Home Equity Conversion Mortgage (HECM) may find it more difficult to get loan approval in a neighborhood with recent multiple foreclosures.

But a CNN Money report shows this may not be the problem it once was, at least not in the sheer number of foreclosures some areas have seen since 2007. According to the article, “Foreclosures fall to five-year low”, home loan defaults, reposessions, and other negative transactions are at quite a low ebb.

“The wave of foreclosures hitting the nation's housing market has been much less severe than anticipated, with foreclosure filings at their lowest level in five years last month, according to a report...”

The article continues, “Foreclosure filings -- including default notices, scheduled auctions and bank repossessions -- were reported on 180,427 properties in September, a 7% decline from August and down more than 16% from a year earlier, according to a report released Thursday by RealtyTrac, an online marketer of foreclosed properties. That's the lowest number of filings since September 2007.”

That is very good news for many housing markets, especially neighborhoods trying to struggle out of the negative effects of older foreclosures which may have occurred early in the housing market woes.

Some borrowers likely tried applying--and being rejected--for home equity loans, cash-out refinance or similar loan products during the worst years of the real estate market crash. With today’s headlines, interest rates at their lowest in recent memory, and what seems to be a recovery in the market in general, it may be time for formerly wary homeowners to consider refinance loans once again. Rising property values have lifted some homeowners out of the “underwater” category with equity in their property accumulating once again. How long before these borrowers can cash in on the equity they are starting to build up now?

That depends on your individual circumstances; now may be a very good time to discuss refinancing with a loan officer and learn what your current--or future--options might be.

Rate this item
(1 Vote)

Top Reads This Month

  • FHA Refinance Loans and Interest Rates

    FHA mortgage loan rates and refinance loan rates stayed well below the 4 percent zone in the last days of the year--now that the new year is here, borrowers may not be sure how long the best-execution FHA mortgage loan interest rates reported at the end of the year may last. Do you know whether your’re ready to commit to…

  • 2018 VA Loan Guidelines and Loan Limits

    If you’ve served in the active military for at least six months, or in the reserves or National Guard for six years, or a spouse of someone who meets these conditions, you’ll likely qualify. If you are approved, you’ll receive a document called a VA certificate of eligibility which will prove to lenders that you qualify for a VA loan.…

About Refinance Loan Rate