Why Today’s Options Will Save Homeowners from Foreclosure

Foreclosure Can Be Avoided Today Thanks to Forbearance Options and Other Factors

Why Today’s Options Will Save Homeowners from Foreclosure | MyKCM

Many housing experts originally voiced concern that the mortgage forbearance program (which allows families impacted financially by COVID to delay mortgage payments to a later date) could lead to an increase in foreclosures when forbearances end.

Some originally forecasted that up to 30% of homeowners would choose to enter forbearance. Less than 10% actually did, and that percentage has been dropping steadily. Black Knight recently reported that the national forbearance rate has decreased to 5.6%, with active forbearances falling below 3 million for the first time since mid-April.

Many of those still in forbearance are actually making timely payments. Christopher Maloney of Bloomberg Wealth recently explained:

“Almost one quarter of all homeowners who have demanded forbearance are still current on their mortgages…according to the latest MBA data.”

However, since over two million homeowners are still in forbearance, some experts are concerned that this might lead to another wave of foreclosures like we saw a little over a decade ago during the Great Recession. Here is why this time is different.

There Will Be Very Few Strategic Defaults

During the housing crash twelve years ago, many homeowners owned a house that was worth less than the mortgage they had on that home (called negative equity or being underwater). Many decided they would just stop making their payments and walk away from the house, which then resulted in the bank foreclosing on the property. These foreclosures were known as strategic defaults. Today, the vast majority of homeowners have significant equity in their homes. This dramatically decreases the possibility of strategic defaults.

Aspen Grove Solutions, a business consulting firm, recently addressed the issue in a study titled Creating Positive Forbearance Outcomes:

“Unlike in 2008, strategic defaults have not emerged as a serious problem and seems unlikely to emerge given stronger expectations for property price increases, a record low inventory of homes, and stable residential underwriting standards leading up to the crisis which has reduced the number of owners who are underwater.”

There Are Other Options That Were Not Available the Last Time

A decade ago, there wasn’t a forbearance option, and most banks did not put in other programs, like modifications and short sales, until very late in the crisis.

Today, homeowners have several options because banks understand the three fundamental differences in today’s real estate market as compared to 2008:

1. Most homeowners have substantial equity in their homes.

2. The real estate market has a shortage of listings for sale. In 2008, homes for sale flooded the market.

3. Prices are appreciating. In 2008, prices were depreciating dramatically.

These differences allow banks to feel comfortable giving options to homeowners when exiting forbearance. Aspen Grove broke down some of these options in the study mentioned above:

  • Refinance Repay: Capitalize forbearance amount – For borrowers who have strong credit, have good or improved equity in their homes, possibly had a higher interest rate on their original loan, have steady employment/no significant wage loss, and income.
  • Repayment Plan: Pay it back in higher monthly payments – For people who cannot reinstate using savings, but have increased monthly income, and do not want to use a deferral program.
  • Deferral Program: Shift payments to the end of the loan term – For borrowers who lost income temporarily and regained most or all of their income but are not in a position to refinance due to credit score, home equity, low total loan value relative to closing costs, or simple apathy.
  • Modification: Flex modification or other mod – For households that permanently lost 20% to 30% of their income, but not all of their income, and want to remain in their home.

Each one of these programs enables the homeowner to remain in the home.

What about Those Who Don’t Qualify for These Programs?

Homeowners who can’t catch up on past payments and don’t qualify for the programs mentioned have two options: sell the house or let it go to foreclosure. Some experts think most will be forced to take the foreclosure route. However, an examination of the data shows that probably won’t be the case.

A decade ago, homeowners had very little equity in their homes. Therefore, selling was not an option unless they were willing to tap into limited savings to cover the cost of selling, like real estate commission, closing costs, and attorney fees. Without any other option, many just decided to stay in the house until they were served a foreclosure notice.

As mentioned above, today is different. Most homeowners now have a large amount of equity in their homes. They will most likely decide to sell their home and take that equity rather than wait for the bank to foreclose.

In a separate report, Black Knight highlighted this issue:

“In total, an estimated 172K loans are in forbearance, have missed three or more payments under their plans and have less than 10% equity in their homes.”

In other words, of the millions currently in a forbearance plan, there are few that likely will become a foreclosure.

Bottom Line

Some analysts are talking about future foreclosures reaching 500,000 to over 1 million. With the options today’s homeowners have, that doesn’t seem likely.

Aerial view of 30525 Lettingwell Cir, Wesley Chapel, FL 33543

JUST LISTED: 30525 Lettingwell Cir, Wesley Chapel, FL 33543 for $202,400!

Spacious 2/2 villa in Meadow Pointe community of Wesley Chapel
30525 Lettingwell Cir., Wesley Chapel FL 33543

Just listed and brand new to the market!

This spacious, maintenance free villa is yours to design to match your signature style! This 2 bedroom, 2 bath abode features a split bedroom floor plan with a bonus den/office and an oversized, enclosed sunroom.

The large living area is open to the dining space and kitchen. Features include a double door pantry closet at the kitchen, an indoor laundry room, a great sized walk-in closet, and plenty of room for dressing in the primary bath, which includes a dual vanity, soaking tub, and separate shower.

Located inside the gated neighborhood of Lettingwell, residents are within walking distance to the community pre-school and public schools. The larger community of Meadow Pointe includes a community pool and recreation, retail, dining, and convenience amenities, easy access to I-75, Shops at Wiregrass, and more!

This home offers space, security, and affordability in this rapidly changing market. Don’t miss out on seeing this home with so much potential. Although it was just listed and is new to the market, it won’t last long!

Click here to take a VIRTUAL TOUR of this lovely villa.

To view in person, call the listing agent and broker associate, Sami Wilensky at (813) 210-2323 today!

Homeowners: Is Now a Good Time to Move?

Many homeowners locked in low mortgage rates a decade ago which prompted them to stay in their homes. The biggest win for them, however, is the equity they have accumulated.

How long have you lived in your current home? If it’s been a while, you may be thinking about moving. According to the latest Profile of Home Buyers and Sellers by the National Association of Realtors (NAR), in 2019, homeowners were living in their homes for an average of 10 years. That’s a long time to time to be in one place, considering the average length of time homeowners used to stay put hovered closer to 6 years.

With today’s changing homebuyer needs, especially given how the current health crisis has altered our daily lifestyles, many homeowners are reconsidering where they’re at and thinking about moving to a home with more space for their families. Here’s why it might be a great time to make that happen.

The real estate market has changed in many ways over the past 10 years, and current homeowners are earning much more equity today than they used to have. According to CoreLogic, in the first quarter of 2020 alone, the average homeowner gained approximately $9,600 in equity. If you’re considering selling your house right now, you may have accumulated more equity to put toward a move than you realize.

Dialing back 10 years, many homeowners also locked in a fairly low mortgage rate. In 2010, the average rate was only 4.09%. This motivated homeowners to stay in their houses longer than usual to keep their rate low, rather than moving. Just last Thursday, however, average mortgage rates hit a new historic low at 2.86%. Sam Khater, Chief Economist at Freddie Mac explains:

Mortgage rates have hit another record low due to a late summer slowdown in the economic recovery…These low rates have ignited robust purchase demand activity, which is up twenty-five percent from a year ago and has been growing at double digit rates for four consecutive months.”

Ten years ago, we couldn’t have imagined a mortgage rate under 3%. Looking at the math today, making a move into a new home and locking in a significantly lower rate than you have now could save you greatly on a monthly basis, and over the life of your loan (See chart below):Is Now a Good Time to Move? | MyKCMAs the example shows, you can save a substantial amount every month if you qualify for today’s low mortgage rate, and the savings can really add up over the life of a 30-year fixed-rate loan.

Bottom Line

As a homeowner, you have a huge opportunity to move up right now. Whether you want to save more each month or get more home for your money based on your family’s changing needs, it’s a great time to connect to discuss the market in our area. Buyers are actively looking for more homes to buy, and you can win big by making a move if the time is right for you.

 

 

This is a traditional wooden front porch with swinging seat and white pillars. An American flag is displayed in the front yard.

How Will the Presidential Election Impact Real Estate?

The year 2020 will be remembered as one of the most challenging times of our lives. A worldwide pandemic, a recession causing historic unemployment, and a level of social unrest perhaps never seen before have all changed the way we live. Only the real estate market seems to be unaffected, as a new forecast projects there may be more homes purchased this year than last year.

As we come to the end of this tumultuous year, we’re preparing for perhaps the most contentious presidential election of the century. Today, it’s important to look at the impact past presidential election years have had on the real estate market.

Is there a drop-off in home sales during a presidential election year?

BTIG, a research and analysis company, looked at new home sales from 1963 through 2019 in their report titled One House, Two House, Red House, Blue House. They noted that in non-presidential years, there is a -9.8% decrease in November compared to October. This is the normal seasonality of the market, with a slowdown in activity that’s usually seen in fall and winter.

However, it also revealed that in presidential election years, the typical drop increases to -15%. The report explains why:

“This may indicate that potential homebuyers may become more cautious in the face of national election uncertainty.”

Are those sales lost forever?

No. BTIG determined:

“This caution is temporary, and ultimately results in deferred sales, as the economy, jobs, interest rates and consumer confidence all have far more meaningful roles in the home purchase decision than a Presidential election result in the months that follow.”

In a separate study done by Meyers Research & Zonda, Ali Wolf, Chief Economist, agrees that those purchases are just delayed until after the election:

“History suggests that the slowdown is largely concentrated in the month of November. In fact, the year after a presidential election is the best of the four-year cycle. This suggests that demand for new housing is not lost because of election uncertainty, rather it gets pushed out to the following year.”

Will it matter who is elected?

To some degree, but not in the overall number of home sales. As mentioned above, consumer confidence plays a significant role in a family’s desire to buy a home. How may consumer confidence impact the housing market post-election? The BTIG report covered that as well:

“A change in administration might benefit trailing blue county housing dynamics. The re-election of President Trump could continue to propel red county outperformance.”

Again, overall sales should not be impacted in a significant way.

Bottom Line

If mortgage rates remain near all-time lows, the economy continues to recover, and unemployment continues to decrease, the real estate market should remain strong up to and past the election.

Resized Front San Rafael

OPEN HOUSE EVENT: 4510 W. San Rafael Street, Tampa, FL 33629 on Saturday, 8/15/20 from 1:00 to 3:00 PM!

Join us for our OPEN HOUSE EVENT to be held at 4510 W. San Rafael St., Tampa, FL 33629 this Saturday, August 15th, from 1:00 – 3:00 PM. 

This lovely home for sale has just been renovated and is ready for a new owner to enjoy all of the spectacular interior upgrades! In addition to new paint, flooring, and bathrooms, the electric service has been updated as well and the garage has new epoxy flooring. This home is priced right at $549,900!

There is so much to admire about this spacious, four bedroom, 2.5 bathroom home! With an interior living space of 1,824 square feet, you will find four sizable bedrooms, two full bathrooms, plus a half bath in the garage. This lovely abode also features a large formal living room, plus a Florida room with sliding glass doors that lead to the backyard. The ample kitchen is at the center of the living space and features new glass backsplashes and quartz counters. This home also has an oversized one car garage as well as a carport that provides a short grocery path right to the kitchen.

In addition, this home is ideally located within walking distance to great schools, and it’s an easy commute to major shopping and downtown Tampa!

If you are unable to attend the Open House Event on Saturday,  call NextHome listing agent and broker, Irwin Wilensky at (727) 644-9183 to schedule a private showing.

Take a VIRTUAL TOUR of this home by clicking HERE.

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Just Sold: 17916 Cachet Isle Drive, Unit #A, Tampa, FL 33647

Simply stunning! Priced at $1,499,000, this lovely estate in Tampa has SOLD for the asking price and is officially off the market. Congratulations to the new owners of this palatial estate!

This home is the largest estate in all of Cory Lake Isles and boasts the most impeccable views. With over 9,400 square feet of living space, this 5 bedroom home features numerous amenities that include two wet bars, a wine room, a second kitchen, three fireplaces, an exercise room, custom closets, an elevator, and more!

Outside, this estate features a breathtaking pool and heated spa, fire pit, exterior kitchen, and pool bath. This home also has its own generator and a separate well for irrigation.

Cory Lake Isles is an amazing gated community with its own waterfront clubhouse, beach, playground, gym, tennis courts, basketball courts, roller blading hockey rink, and resort style community pool.

To view additional photos, view the property website here.

To discuss selling your home or to learn about the cutting edge tools NextHome SunRaye utilizes to market luxury homes for sale like this one, please call NextHome SunRaye listing agent, Sami Wilensky at (813) 210 – 2323. 

Resized Front San Rafael

OPEN HOUSE EVENT: 4510 W. San Rafael St., Tampa, FL 33629 this Saturday, August 1st, 1:00 – 3:00 PM

Join us for our OPEN HOUSE EVENT to be held at 4510 W. San Rafael St., Tampa, FL 33629 this Saturday, August 1st, from 1:00 – 3:00 PM. 

This lovely home for sale has just been renovated and is ready for a new owner to enjoy all of the spectacular interior upgrades! In addition to new paint, flooring, and bathrooms, the electric service has been updated as well and the garage has new epoxy flooring. This home is priced right at $559,900!

There is so much to admire about this spacious, four bedroom, 2.5 bathroom home! With an interior living space of 1,824 square feet, you will find four sizable bedrooms, two full bathrooms, plus a half bath in the garage. This lovely abode also features a large formal living room, plus a Florida room with sliding glass doors that lead to the backyard. The ample kitchen is at the center of the living space and features new glass backsplashes and quartz counters. This home also has an oversized one car garage as well as a carport that provides a short grocery path right to the kitchen.

In addition, this home is ideally located within walking distance to great schools, and it’s an easy commute to major shopping and downtown Tampa!

If you are unable to attend the Open House Event on Saturday,  call NextHome listing agent and broker, Irwin Wilensky at (727) 644-9183 to schedule a private showing.

Take a VIRTUAL TOUR of this home by clicking HERE.

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JUST SOLD: 0.3 Acre Parcel Located at 29th Avenue South, St. Petersburg, FL for $119,000!

JUST SOLD!
This 0.3 acre lot of vacant land located on 29th Ave S, St. Petersburg, FL 33711 has sold for $119,000!
This sprawling parcel fronts an unusable section of Clam Bayou in south St. Petersburg. The new owners will start building their dream home and enjoy never having any rear neighbors – a very desirable perk!
Located at the end of a dead end street with very few neighboring homes, the new owners of this land will enjoy stunning sunsets overlooking the bayou and Skyway Trail every night. This was a great deal for both buyer and seller, and NextHome SunRaye Realty had the pleasure of bringing everyone together to make this deal happen.
Have you been thinking about selling your home, but are now feeling unsure due to the current health crisis? NextHome SunRaye understands that this is an uncertain time. Give our St. Pete office a call at (727) 343-8600 so that we may discuss the current market, your home’s value, and what your options are.

In addition, let us tell you about the cutting edge selling tools that we have at our disposal that will enable us to effectively market your home virtually and increase its exposure to home buyers while minimizing your risk to illness. You may decide it is the right time to sell, or maybe not. In either case, NextHome SunRaye is here to provide you with valuable information to help you decide and we are ready to represent you in the home selling process, whenever you are ready to make a move. Stay safe and stay well!

 

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JUST REDUCED: 8415 N. Albany Avenue, Unit #C, Tampa, FL 33604 is now Priced at $94,900!

Are you looking for a spacious 3 bedroom, 2 bathroom home for an affordable price? Look no further! This roomy townhouse features a large kitchen with pass-thru to the great room, a large enclosed patio with hot tub, and a small rear yard that is fence enclosed. All bedrooms, bathrooms, and laundry closet are located on the second floor. This home offers enough space for everyone with 1,470 square feet! Best of all, this home is now priced at $94,900!

This home is located on a quiet dead end street and offers easy access to I275 and Dale Mabry Hwy! Best of all? There are no HOA fees! That’s right! NONE!

Don’t miss out on seeing this townhouse at its newly reduced price! This is a deal that can’t be beat!

To take a VIRTUAL TOUR of this home, click HERE.

To view this home in person, or for assistance with placing an offer, call NextHome SunRaye listing agent, Sami Wilensky at (813) 210- 2323.

 

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Happy Luke Day!  Join in Our Annual Day of Community Outreach by Supporting Canine Companions for Independence!

NextHome SunRaye Realty is joining forces with our fellow NextHomies around the country in celebrating Luke Day, our annual day of community outreach that was created in honor of our company mascot, Luke!

Today is the day we come together in support of a great organization – Canine Companions for Independence (CCI). Through Canine Companions, we are inviting Facebook friends, families, clients, and colleagues to assist us in making a difference by donating and helping to raise funds to support the mission of Canine Companions for Independence, our national charity. This incredible organization works with adults, children, and veterans with disabilities by providing them with expertly trained assistance dogs that can help them live a better quality of life!

Click here to see a local news report on News Channel 8/wfla.com from February of this year that shows footage of a recent service dog graduation where these special dogs get paired with their partners for the first time. It shows how two service dogs, Lauren and Tibet have been called to duty at the Hillsborough County Courthouse facility in Tampa, Florida to provide assistance to abused children who face tough testimony at court hearings. These dogs are there to help them relax and let them know that they have special support standing close by. These highly trained service animals also serve children in foster care at a child advocacy and protection center here in Tampa.

Every dollar you donate will help provide these incredible dogs to people that need their assistance. From picking up keys, turning on light switches, comfortably going to the park with family and much much more.

With your help, we can get more of these amazing Canine Companions assistance dogs into the lives of those who need them.

Thanks for your support! Click HERE to help our team, the SunRaye Tail Waggers, reach our $1,000 fundraising goal!