The fiscal cliff and housing

The housing market has finally improved and it looks like the worst is behind us. However if the Washington dummies fail to resolve the fiscal cliff, housing is in trouble.

Fiscal cliff could cost the U.S. two million jobs next year and cause the unemployment rate to stay stubbornly stuck above 8% through 2014. Fewer jobs could translate into less demand for new homes, possibly even a new wave of foreclosure filings as newly unemployed workers struggle to make mortgage payments.

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Are we headed for another bubble?

Prices are really jumping because of the shortage of homes available and the big hedge fund dummies buying up everything. However, i am concerned. This is not a natural progression. Usually prices increase when income increases. This is not why prices are increasing. Income has not increased in Ca and the job market still stinks.

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New short sale rules

Fannie mae and Freddie mac have come up with new rules.:

As reported by the LA Times, Fannie and Freddie have finalized their new “streamlined” short sale guidelines effective Nov.1st.

Here are the highlights of the finalized criteria:

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Lack of foreclosures bad for the Real Estate market?

According to Diana Olick of cnbc,  foreclosures are down because of all the regulations imposed by states, especially CA. Now banks have to show proof of loan ownership before they can foreclose. That’s tough since the loans were “sliced and diced”.

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New short sale and loan mod rules

Homeowners receiving loan modifications for their primary residence (and noted on their credit report); are now being treated as short sellers by Fannie Mae…even if the homeowner was never late on their mortgage.

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