Friday, February 15, 2008

One of my predictions for 2008 Chicago Real Estate comes true

One down. Two to go.

In a previous post on predictions for 2008, I predicted that there would not be as many foreclosures in 2008 as there were in 2007. I predicted that one of the reasons for the fewer number of foreclosures would be programs mandated by the government to restructure loans that are in danger of entering foreclosure. The details of the first of these kinds of programs are being released this week.

Governor Rod Blagojevich announced the Homeowners Assistance Initiative program today. With $200-million in funds from four major mortgage lenders, the program is aimed at trying to ease the rising tide of home foreclosures. The program will offer 30-year fixed-rate mortgages, set at 8%, guaranteed by the Federal Housing Administration (FHA.) The interest rate is capped at 8% and is limited to loans with a maximum amount of $417,000. The loans will not have pre-payment penalties and no income requirements for borrowers.

To qualify, borrowers must attend credit counseling and have a credit score of 580 or better. This is much lower than for traditional mortgages.

I'm batting 33%. I should retire.