This last spring new-home sales jumped 16 percent -- In the biggest percentage increase since 1993 last spring, new home sales jumped 16 percent. The U.S. Census Bureau reported new single-family home sales rose from a seasonally adjusted annual rate of 844,000 in March to April's figure of 981,000.
This data flies in the face of predictions of doom and the lowering of prices around the country. It seems that this cycle will seem more like a dip than a wave because the information on prices flew around the market via the Internet, causing people to adjust their behavior and modify their listings.
Another way to look at things is as follows. Any time inventory disappears, homes that come on a healthy market disappear fast, which takes down the average listing time. What happens is, then people put inventory back on the market at higher prices. Inventory disappears when the average time on listing goes higher than around 60-70 days. People keep watching the right indicators - waiting for the bottoming out of inventory.
Realty Trac released its May 2007 U.S. Foreclosure Market Report on June 12, showing a total of 176,137 foreclosure filings - default notices, auction sale notices and bank repossessions - during the month of May, were up 19 percent from the previous month and up nearly 90 percent from May 2006. Home sales prices were falling, with a saturated supply of for sale signs. All this pushes new homes prices down.
Ultimately it is the responsibility of the broker or loan officer to determine if the borrower can indeed make the monthly payments. Loan officers encouraged people to exaggerate their ability to pay for many of these default loans, and lenders simply allowed these loans to be funded, though highly suspect. Investors, companies and people who buy the loans from lenders, also suspended disbelief, that overleveraged people with weak credit histories deserve a loan, and bought the collateralized debt obligations that the loans are based on. Many loans are packaged into large CDO packages designed to spread the risk and allow single large transactions instead of hundreds or thousands of single loan purchases.
Mortgage brokers and banks typically start their interviews with those seeking a home mortgage lender by asking about the person's credit in general, then working their way to the critical question: What is your Social Security Number (SSN)? They need to do it this way because the rate sheets are divided between credit and collateral. When looking at credit, most mortgage brokers take three things into account: credit - meaning the probability that a borrow will pay up; collateral which is the value of the property which ultimately acts as a guarantee of last resort for most loans; and monthly payment capacity.
However there are new companies such as Dogtor Paco, Inc. doing what's is known as the frictionless loan, which starts off with mortgage quotes and moves quickly to the loan application and an electronic submission. The conditional letter of approval (CLA) details the steps to close the loan. If the initial submission is denied, Dogtor Paco will help users select and resubmit to alternative banks that will do the loan. the goal includes locking the loan and then going to processing the loan within two hours after beginning the application.
Dogtor Paco's Lender's Corner is a patent-pending online lending services engine where real estate agents, brokers and lending professionals can facilitate the approval and processing of loans for customers faster. Dogtor Paco’s powerful on-demand mortgage payment calculator provides good faith estimate (GFE) quotes with full disclosure including monthly payments and all closing costs. Dogtor Paco uses instantaneous rates to calculate closing costs and monthly payments for a particular property. The powerful Loan Organizer' tells licensed subscribers how much they will make by submitting a client’s application electronically through Dogtor Paco’s engine where the loan will be completed quickly and frictionlessly.
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