photo credit: TheTruthAbout…
Droves of well to do Chinese are descending on USA soil. They are equipped with some, often limited knowledge about the Real Estate situation, but ready and willing to strike, meaning – buy.
Not since the end of 80th, or some 20 years ago, have we seen such a movement on the part of Chinese citizens. At that time the acquiring of RE in USA was done quietly, through representatives and the motive was mostly political.
Now, arriving in organized tours, consisting mostly of RE agents, so far, they are driving through major cities with a presence of a good college and snapping up bargains and foreclosing properties.
San Francisco, Los Angeles, New York, Washington and Las Vegas are the most popular destinations.
Since US relaxed its visa rules for Chinese tourists and China adjusted its foreign investment policies, it became much easier for Chines people coming to America and buy houses, which many hope to hold on to for a while.
The tours are arriving in rapid succession – buyers are still may be in for a surprise: there are not many cheap houses in good neighborhoods available. Nevertheless, many Chinese buyers are ready and will pay for their acquisitions in cash. The targeted price being $200-300K, arriving potential clients spend approx. 10 days in California and Nevada actively touring the market. Will their involvement stabilize the RE market or nor is highly questionable, meanwhile some sellers are relieved of the heavy financial burden, some buyers – of the major chunk of funds, and both sides are, hopefully, satisfied with the transaction.
Source: LA Times
While all the buying with the help of foreign investors is gaining popularity, American buyers are having difficulties to qualify for the loans, even thought rules are relaxed and banks are said to be willing.
At the same time “Hope for Homeowners” program is not working as well, as it was supposed to. It attracted only 312 people.
“…The three-year program was supposed to help 400,000 borrowers avoid foreclosure. But it has attracted only 312 applications since its October launch because it is too expensive and onerous for lenders and borrowers alike…”
“What most people don’t understand is that this program was designed to the detail by Congress,…and unfortunately it has made this program tough to use.”
The goal of the program, run by the Federal Housing Administration, was to allow borrowers who owe more than their homes are worth to refinance into more affordable 30-year fixed-rate mortgages insured by the government…But part of the problem is that the program’s success hinges on the lenders’ willingness to participate”.
…Congress originally allowed the FHA to insure new loans for only 90 percent of a home’s value.” Unfortunately, many homeowners simply don’t have any equity in their homes.
Later, HUD increased the insured amount (by grant of the Congress) and the department decided to guarantee up to 96.5 percent of the value of new loans. So far not much changed. Lenders are still balking.
Source: Washington Post
