Watching Fox News today an interesting topic caught my attention. Bob Massi was a guest and talking about real estate and predictions of 2011.
Higher Interest Rate: In some point in time rates will go up.
More Forclosures: We’re not finished with foreclosures yet. There are 10, 7 & 5 year ARMs that are adjusting this year. A lot of these homes are “underwater”, so refinancing isn’t an option. And homeowners who are on the edge of maintaining their payments won’t be able to afford higher rates and will be forced into foreclosure.
Strategic Foreclosures (Buy, Rent, and Dump): Homeowners with good credit but who are underwater will buy a second home at bargain prices and move out of their “underwater” home. They will rent their original home and do a “strategic foreclosure” by pocketing the rental payments for the year or so the bank takes to go through the foreclosure process.
Mortgages will be hard to get because of all the above prediction, lenders will tighten requirements and money for real estate and it will be harder to get. This time is also a great oppurtunity for investors. Investors who have the cash or financing will take advantage of this opportunity. The strategy: Buy and hold for 3 – 5 years & make a fortune.
Question and Response
Viewer: “My wife and I bought a house with a conventional loan and have a home equity loan also, neither of which is paid off. My wife died last summer and we didn’t have mortgage life insurance. If I notify the lender she died will they call the mortgage even though I am current? Can they force me to reapply for the loan or even foreclose?
Massi: “First of all I am sorry for your loss and I will tell you, you don’t have any obligation to let the lender know your wife has passed. Both of you have signed the mortgage and loan papers, which you told me in the email. You are current on the payments as a result of that you don’t have any obligation. You don’t have to worry about foreclosure as long as you remain current on the payments. You are not threatened to lose your house . So, as a result no obligation to call, you should be fine just continue to make the payments.”