Are foreclosures on the rise? Is that a big surprise?

A recent report states that 1 in 7 homeowners in the nation are behind on their mortgages and as many as 1 in 4 homeowners are upside down on their homes. We saw a record number of foreclosures in 2009 and yet, we are still sitting in a place where over 10% of the nations’ workforce is unemployed, who knows how many under-employed and, we’re expecting to see a recovery in the economy in 2010?
Well, I can’t answer whether we’ll see a recovery in the economy as a whole but I can tell you, in Minnesota, in my neck of the woods – Dakota and Scott counties – the time to buy or sell a home is now, before the next wave of foreclosures hits. Why?
1) As a nation, we have been artificially keeping interest rates low over the past year. The government says they are going to stop doing that in March. Result – most likely, increase mortgage interest rates.
2) There is a tax credit for first time home-buyers and current homeowners that ends with purchase agreements signed after April 30th. That’s less than 90-days folks and up to $8,000 you don’t want to lose.
3) FHA’s guidelines are changing and it’s going to cost more in mortgage insurance and more in closing costs by April 5th and early summer. See full information here
4) First-time Home-buyer money is being released now and is available on a first-come, first-served basis. What is available today is limited and not always replenished. i.e. http://www.knowyourhomeloan.com/dakota-county-to-release-new-money-for-first-time-homebuyers/

SELLERS – Traditionally, many sellers have waited until Spring in Minnesota to list their homes. In 2010, the four items above, in addition to the fact that we are currently in a sellers’ market and depending on your homes’ price range, you’re about to see some competition you may not want to be up against (the impending foreclosures) make that tradition a BAD one. As a seller, the market is right – now.
BUYERS – I can’t remember a time where there were so many incentives to buy! If you’ve been sitting on the proverbial fence – get off! First time home-buyers are especially blessed with benefits on the front-end in the way of down payment and closing cost assistance, silent second mortgages with no-interest and no-payments, some of which are forgiven over time, lower interest rates than most first-time home-buyers lifetimes have shown and back-end incentives like up to $8,000 tax credits and fix-up funds and energy-rebates to boot?!? Of course there are also the all-time forgotten, normal benefits to home-ownership like the interest and property tax deduction and well, the ability to paint your walls whatever color you feel like! HELLO people! Are you paying attention?? This is going to go away and if you are in the position to buy now, don’t be the one shaking your head a couple years down the road saying, “I wish I would have done this or known that two years ago.”

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