Real Estate Lending Trends for 2013

Paddy Deighan J.D. Ph.D Real estate is at its most affordable rate in recent history. In my opinion, the real estate market cannot claim to be fully in “recovery” until lending loosens up. Sadly, most homeowners will not be able to take advantage of the great deals out there using conventional financing. According to the Wall Street Journal, lenders are unlikely to ease up on their credit and lending standards in 2013, and “buyers shouldn’t expect that getting a loan will get easier anytime soon.” According to Realtor Magazine a recent spate of refinancing activity has actually contributed to this trend, the report adds, because banks have “plenty of business coming their way” already. Don’t despair, I believe that good news will help all of us in 2013 (see below). Other issues could also restrain mortgage lending in the coming year. Banks are required to keep more money in reserve when they originate and purchase mortgages, making lending more difficult. Additionally, as Congress appears to have given up on avoiding the “fiscal cliff,” mortgage rates will likely head lower but home-buyers will have less money with which to purchase properties in 2013. According to Mortgage Reports at this point, many economists are predicting a recession regardless of the outcome of today’s talks, which are unlikely to yield anything that can be acted upon quickly enough to avert the cliff before midnight tonight (which just passed 30 seconds ago)!!! Happy New Year!! I cannot help but think that non-conventional and “creative” financing will make a huge comeback in 2013 as more would-be homeowners wish to take advantage of affordable housing but find themselves completely out of options in the conventional mortgage market. There is opportunity for everyone,…real estate agents, potential home owners, home sellers, and non-conventional lenders, so it makes sense to me that 2013 might be a better year for everyone and I certainly hope and wish this for everyone. Happy New Year and best wishes for a healthy and prosperous New Year!! Paddy Deighan J.D. Ph.D http://www.homesavers.pro