Calabasas, CA (PRWEB) April 24, 2011
The National Association of Realtors reports an upswing in home sales, but attorney Philip Kramer of Kramer & Kaslow isn’t sure the outlook is as rosy as the realtors proclaim. According to Kramer, “A lot of these sales are cash deals. Regular homebuyers aren’t in the marketplace – they’re still suffering.”
A recent Bloomberg News article argues that the banks may be erring too much on the side of caution even as they erred on the side of loan-granting laxity in the period leading up to 2008 collapse.
“FICO credit scores for loans insured by the Federal Housing Administration, a government program that extends credit to borrowers with down payments as small as 3.5 percent, rose to an average of 703 in February, up 10 points from a year earlier, on the scale of 300 to 850,” says Kramer. “FICO scores, developed by Fair Isaac Corp. (FICO), for FHA loans averaged 647 in February 2008. They climbed after the FHA imposed minimum scores for the first time in October and banks added stricter credit overlays.”
The weighted average FICO score for a home purchased with a Fannie Mae mortgage was 762 last year, up from 716 in 2006, the Washington-based mortgage finance company reported Feb. 24. Fannie Mae loans, which usually require a 20 percent down payment, had an average 68 percent loan-to-value at origination.
Foreign buyers, downsizing empty-nesters, and speculators who are able to buy properties at well below even current distressed levels seem to be making up the bulk of current activity. Philip Kramer feels that what we’re seeing now is little more than the realty market taking a deep breath. “The lenders have behaved so badly,” Kramer argues, “And now they’re trying to figure out where to move next. It’s like taking a deep breath before you jump into cold water. Are the banks going to jump in? Are they really going to change their behaviors towards consumers? I think that remains to be seen.”
One thing is certain: until the real estate disaster is resolved, it is unlikely that anything approaching “normalcy” is going to occur. As attorney Kramer puts it, “Hold on to your hats. It’s going to be a bumpy ride.”
About The Law Offices of Kramer & Kaslow
Kramer & Kaslow is a Professional Law Corporation; our goal is to protect our client's rights and find solutions. We strive to give our clients the professional and personal attention that they deserve. The Law Offices of Kramer & Kaslow specialize in Civil Litigation, Real Estate Law, Franchise Law, Entertainment Law, Estate Planning, Corporate Business Transactions, Trademarks, Copyrights, and International Law. For more information call (818) 224-3900 or visit http://kramer-kaslow.com