Wednesday, July 25, 2007

Want to buy a house.

.
Anybody out there want to buy a house?
Either a brand spanking new one or a slightly used one?

For many months now, those with eyes to see, and even a vague knowledge of what's going on in the housing and financial industry have been worrying about the huge numbers of houses being sold to consumers with average (read poor) or poor (read very bad) credit and no down payment. This follows the collapse about 3 years ago of the mobile home - land purchase loans to anyone who would slightly fog a mirror held under their nose.

This week sees news articles about the numbers of mortgages in default in various areas of the country. See here and here and here. And see too many other news articles to count on your fingers and toes.

Countrywide mortgage has recently been advertising in my neck of the woods like every thing is so good that they will damn near pay your mortgage for you if you'll just make a call to them

But a good friend of mine who has been in the mortgage industry for 36 years told me 6 months ago that countrywide would accept the application and perhaps even approve it, but would keep asking for more info and new surveys and appraisals even up to the hour before the closing making it impossible to close a loan with them.

What does this mean to you? Damnifiknow. I don't know you or your financial circumstance. But I do know that if you have the cash, you can go to any bank around here, and I suspect in a lot of other areas, and buy a brand new house built by a good builder, in a good subdivision, for less than they loaned the builder. Because they have had to foreclose on him and any number of what used to be good risks and have more houses on their books than the federal regulations permit. I have personally been offered houses for $80,000.00 less than the appraisal of $250,000.00.
If only I had the money or knew some one with the money to invest.

What will be the fall out for any of us. Maybe not much. Maybe you are struggling to make your own mortgage payments. Now might be a good time to see if you can negotiate better terms on your present mortgage.

The housing industry has carried a huge part of the countries economy for a decade now. Big and small industry has moved overseas to where production cost are less.
The good thing is that this has spawned huge numbers of small businesses. The Bad thing is that so many of them are serving the housing and related industry.

Henry Ford priced his cars so that his own workers could afford to buy them. What happens if the consumer doesn't have any money to spend?

Riddle me that, Batman.

3 comments:

Jean said...

The housing catastrophe in this country is a sad thing. Once again, greed of the big boys has hurt many.
As much as I hate my house because of its history, financially, I'm better off here. At least for now.
I'd love to be somewhere else, but there's the lousy job market. And my age. Talk about feeling stuck.

kdzu said...

I certainly can identify with the feeling stuck comment. Times like these seem to require a hunker down like attitude. Everything goes in cycles. This one has the potential to either linger, but my thinking is now is a time to expand your view and try to see the potential.
As for your age, you're younger than me and to my way of thinking just coming into your prime. Fine wine just like good steaks have to be aged to reach perfection.

Jean said...

You, my friend, certainly know how to make me smile. Too bad you're not hiring :)

thank you for the lovely compliments.