Moving to another area of the country today to accept a new job requires a lot more thought than it used to because so many home owners are “upside down” on their mortgage – they owe more than the home is worth.  Workers who do not have the cash to bring to closing to sell their home must consider becoming absentee landlords and often renting at a loss or consider a short sale or as a last case, foreclosure.  Giving the house back to the bank. We are finding that sellers faced with this situation are having more and more success negotiating a short sale with the bank.

From the NPR website:

“More and more people could face the dilemma of choosing between a job and a house — especially if the job market improves faster than the housing market.

Joblessness is a drag on the housing market, with many people no longer able to afford their homes. But the reverse is also true; a house that’s lost value can prevent someone from taking a job that requires a move.

Although recruitment has been down over the past few years, some experts say the inability to unload homes could become one of the biggest obstacles to matching talent with the right job. Experts say more and more people could face the dilemma of choosing between a job and a house — especially if the job market improves faster than the housing market.”

Ann Arbor area real estate www.Piperpartners.com

About 22% of homeowners who refinanced their first-lien mortgage during the last quarter put in cash to lower principal, tying a record for the third highest “cash-in” share since Freddie Mac started keeping records in 1985.

Many borrowers today must pay down principal to lower their loan-to-value ratio in order to qualify to refinance their mortgage, either because their Ann Arbor homes have declined in value,  or because of tighter lending standards. A growing number are willing to do it because mortgage rates are at 50-year lows, at the same time that relatively safe, cash investments such as certificates of deposit, savings accounts and money-market funds are paying very low interest, “which makes the choice of paying down mortgage principal very attractive to borrowers with extra cash reserves,” says Frank Nothaft, Freddie Mac’s vice president and chief economist.

Read complete article here

The November Mortgage Monitor report, released by Lender Processing Services, Inc., reveals a nationwide loan deterioration ratio higher than 3:1 – indicating that for every one loan improved, three more loans are deteriorating.

Foreclosure sales jumped in October, with the rate at 5.6 percent of foreclosures in inventory. The number of foreclosures on the market continues to stall as foreclosure timelines extend. Nearly 30 percent of properties that have been in foreclosure for 12 months have not yet been put on the market for sale – twice the level of the prior year. Foreclosure inventories continued to climb to record levels.

States with most non-current loans: Florida, Nevada, Mississippi, Arizona, Georgia, California, Michigan, Indiana, Ohio and Illinois.

Read more at:  Real Estate Economy Watch