Where is the Real Estate Market heading? Lenders show optimism. Getting back to Second Mortgages..

Mortgage Lenders Getting Back to Second Mortgages
La Jolla, CA (PRWEB) October 15, 2012
Tobias Nergarden of the Real Estate Marketing Insider issued his observations on new reports from the LATimes that the second-mortgage lending is increasing as home values begin to rise, saying that it would help homeowners and buyers as the availability of home financing options expands. Second mortgages are loans or credit lines, either fixed-payment or adjustable-rate, in which the lender is “second position” to receive their funds in the event of a foreclosure; only after proceeds from foreclosure are used to pay the balance of the first mortgage is the second mortgage-holder entitled to compensation. Consequently, second mortgages are considered higher-risk loans than first mortgages and usually carry higher fees and interest rates.
Generally, economists are very excited about this news, calling it an indicator of greatly increased confidence in the economy on behalf of banks. One of the reasons that banks were so unwilling to grant second mortgages to best real estate websites was because of a lack of confidence that home prices would remain stable enough for them to recoup their investment in the event of foreclosure.
Now, at least anecdotally, Equifax reports that banks are “pretty willing to do [second] loans when their customers need them.” However, the optimism is still cautious; slow job growth and economic uncertainty are still threatening the stability of the market. This is most visible in interest rates, which vary considerably by location, loan size and the consumer’s credit score, where they might be expected to be more homogeneous if the market were full-strength.
For more information, call Regina Singh – 714-883-5205 or email at Regina@ReginaSingh.com