“Federal crackdown could spark housing sales”
The real estate industry is bracing for a surge in home purchases,
betting buyers will rush to get ahead of tighter federal government
standards for the mortgage industry.The Finance Department will stop
guaranteeing 40-year and zero-down-payment mortgage loans starting
Hard to believe this is what the media and even some industry players think will happen because of the government change. When I was putting together residential mortgage applications, I had less than 10% going with the 40 year amortization. And I did not have 1 application who went with 100% financing, no money down. Now, this is not to say nobody did these deals, but really, in the grand scheme of things, is this really going to all of a sudden create a “surge in home purchases” before Oct. 15th?
Highly doubtful in my opinion. It may light a small fire and push a few properties to sell a little quicker than they are currently, but given the very small percentage of total purchasers that use these products, I highly doubt you should quickly list your house to capitalize on this upcoming change. As it stands, some banks/lenders are eliminating this program long before the Oct. 15th Federal date. Thus, stopping a “potential” rush of people applying for these products. Of course, this is just my opinion, I welcome your thoughts on the matter!