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In spite of falling interest rates and low home pricing, sales hit a 14-year low this year. Analysts project home sales for 2011 to fall short about one million homes from what would indicate a healthy market. The median sales price since the same time last year dropped five percent, bringing the median down to roughly $163 thousand dollars. Although first time home buyers have slightly increased to 36%, that is still 4% below what is considered an indication to recovery.
A backlog of foreclosures and government regulations have prevented the flooding of the housing market to avoid flooding housing inventory and further decreasing pricing. 2011 is expected to bring 20 percent more homes lost to foreclosures over the previous year. As the home market inventory increased to just under 4 million homes, an equal increase in demand has not been the case. The time expected to sell home inventory has increased 33 percent, going from six months to over nine. Consumer knowledge of increasing foreclosures may lead to hesitation on purchases in anticipation of further depreciation.
Home mortgage interest rates have fallen .02 percent on a both 30 and 15 year loans since late last year, but have not been enough to signal a healthy housing market recovery.
September 13, 2011 – In its 10th hearing on home finance reform, the Senate Banking Committee today discussed how to reduce the government’s role in the home mortgage industry.
The reform effort came from a plan presented to Congress by the Obama Administration in February that would reduce the government’s role in home loans. One of the main aspects of his plan was to reduce and eventually eliminate Fannie Mae and Freddie Mac, the two mortgage entities the federal government seized during the housing crisis of 2008.
“The Obama Administration believes that, under normal market conditions, the private sector – subject to stronger oversight and standards for consumer and investor protection – should be the primary source of mortgage credit and bear the burden for losses,” a February White House press release stated.
After three years of controlling the two companies, the government now backs nearly nine out of every 10 new mortgages.
Talks in the Senate today furthered this plan, with lawmakers agreeing that Fannie Mae and Freddie Mac must be downsized, but still debating what the scale of the government influence in subsidizing home finance should be.
“I firmly believe that we need to reform our housing finance system but I am concerned about the unintended consequences for our housing market and economy that could result if a government role is eliminated completely,” Senate Banking Committee Chairman Tim Johnson (D-South Dakota) said in his opening statement. “Returning to the housing system we had before the Great Depression would not be an optimal outcome.”
Johnson outlined concerns about eliminating the government role completely, stating that a lack of government regulation would likely increase interest rates and changes in the availability and character of 30-year fixed mortgages.
“The 30-year fixed rate mortgage would also likely take a different form and require substantial down payments and higher interest rates, restricting the number of borrowers to a small number compared to today,” Johnson said.
Although specific legislation regarding the housing reform plan has not yet reached either the House or Senate floor, the first action in reducing Fannie and Freddie’s presence will be on Oct. 1, when the Federal Housing Administration – which regulates the two companies –lowers its loan limits to pre-housing crisis levels.
Obama’s plan for housing finance reform also includes increasing consumer protection to fix fundamental flaws in the mortgage market, heightening transparency for investors and raising underwriting standards.
A new scheme is threatening the already unsteady housing market. Scammers are luring potential renters with foreclosed properties and stealing their money and financial information.
For-sale properties are still struggling to compete in the housing market in comparison to rental properties. After years of unpaid home loans, thousands of properties across the country are headed into foreclosure. The homes are usually left vacant during this time, while their owners, flooded with home loan bills, move to a different area.
Robert Hagberg, Freddie Mac’s associate director of fraud investigations, told the LA Times that Freddie Mac owns more than 53,000 houses across the country which are either for sale or under contract as of June 30. Hagberg estimates dozens of rental scams have occurred in recent months.
The process typically proceeds in a similar fashion: the con artist finds a property and lists it online. The con artist, acting as the property owner, communicates with potential tenants and takes their information and cash deposits. In some instances, the scheme ends after an initial deposit is received. Other scammers break into the property, change the locks and rent it out for as long as possible.
While the scams might be obvious to some, they have what people in the current economy long for: a great deal. Most of the properties listed at half the competition’s price — making it difficult to resist for cash-strapped tenants. However, these rental scams can harm people of all economic classes, even previous home owners, who are overwhelmed from failed home loans and foreclosures.
The scammers steal anywhere from several hundred dollars to upwards of thousands of dollars from the applicants.
Robert O’Hara, a Re/Max Synergy foreclosure specialist told the LA Times that one applicant was victimized out of $10,000 from paying upfront fees and rental payments to a fake landlord. After the scam was exposed, the victim was forced out of the home.
According to MSN, if the tenants are unaware of the scam, they will not be charged with a crime. However, they will have to move out quickly — and will likely never see their money again: two consequences that previously foreclosed home loan borrowers are already all-too-familiar with.
“This is happening all over the place, in every price range. They take the victim’s money and disappear,” O’Hara said to the LA Times.
Some recommendations to prevent a rental scam, provided by Freddie Mac, include proper research and patience. First, search online and make sure the property is not currently listed for sale. If the posting offers an address, drive by the property and check for any signs out front. If there are for-sale signs posted, notify the listing agent of the potential scam.
Another method of scam prevention is waiting to submit personal information. As with a home loan application process, until the property has been certified as a legitimate listing, do not submit any credit applications online. This poses a threat to the applicant’s social security number, financial history and credit information which can impact one’s future rental or home loan applications.
Chuck Lee, an investigator with the Volusia County Sheriff’s Office in Florida, told MSN the easiest way to prevent rental scams is refusing to use cash or money wires. Anything beyond these two payment forms increases the criminal’s chance of being caught.
“If you didn’t use cash, I’d say probably 90 percent (of these scams) you could avoid,” Lee said.
Reports released today state that Canada’s new housing market is expected to moderate in 2012 and 2013. Additionally, the existing housing market is expected to remain steady, at or slightly below inflation, according to the Canada Mortgage and Housing Corporation (CMHC).
The CMHC said housing starts will be in the range of 210,800 to 216,600 in 2012, with a point forecast of 213,700. Home construction is projected to continually slow into 2013, with ranges of 177,300 to 209,900 with a point forecast of 193,600. Existing home sales are projected to slow to a range of 449,200 to 465,600 with a point forecast of 457,400 units for 2012. Home sales, fueled by mortgage loans, are expected to increase in 2013, with a point forecast of 461,500 units.
“A weaker outlook for global economic conditions and the waning of the effect of pre-sales from late 2010 and early 2011, which contributed to support multi-family starts this year, will bring moderation in housing starts next year,” Mathieu Laberge, Deputy Chief Economist for CMHC, said in the agency’s fourth-quarter release. “Nevertheless, employment growth and net migration will help support housing starts activity going forward.”
But not everyone agrees with the forecasts.
Benjamin Tal, an economist with Canadian bank CIBC, reported this week that “in a final analysis, not all is well in the Canadian housing market.” According to Tal, prices have been overshot in cities such as Toronto and Vancouver. He predicts that slower sales will be followed by lowered prices in many Canadian cities.
Even with dismal and uncertain predictions, the outcome could be different than the American market. Currently, Canadians have more household debt than Americans did before the U.S. housing crash. As a preventative measure, the Canadian government has restricted mortgage lending rules four times in the past four years. As a result, the Canadian standards for mortgage loans have been higher. Additionally, borrowers and government agencies have been more cautious about mortgage loans. In 2011 and part of 2012, the housing market in Canada was strong. After the added restrictions by the government, the market slowed down.
Canada’s five major banks, which handle the majority of the country’s mortgage loans, have focused on other financial aspects in order to ride them through this time. Instead of focusing on mortgage loans, they have promoted credit cards and auto loans, according to Reuters.
The newest change in lending standards, which took effect in July, forced buyers to cut back on their budget. It also inhibited some buyers from even entering the market. Some economists and real estate agents in Canada approved the drastic measures by the government. Ron Carroll, a real estate agent in Toronto, applauded the move.
“It’s had a definite impact on first-time buyers. Money is almost free, but you shouldn’t give them too much rope,” he said to Reuters.
In a proposed budget plan, interest rates for federal student loans will be linked to the government’s cost of borrowing.
In President Obama’s new budget request, which spans a lengthy 244 pages, several large changes to the federal student loan program were announced.
Other plans for the year’s budget include additional funding for community colleges, more federal work-study programs and increasing the maximum amount that Pell Grants deliver.
But one of the most discussed items dealing with higher education is the change to the student loan interest rate. Instead of the current system, where student loan interest rates are fixed by law and subject to congressional changes, the President’s new budget proposes changing the interest rates to market-based fluctuations.
The plan is a way to reduce the growing student loan debt problem in the country, and to reduce the overall cost of higher education. Student loan debt passed the $1 trillion in late 2011 or early 2012, and the number is not set to decrease unless large scale plans are enacted.
If the interest rate change became law, it would reduce the current cost of students’ payments. But interest rates change constantly. Since the market is on an upswing, the rates will likely rise past the current fixed rate. Unless a cap is set, student borrowers could wind up owing even more than they do now in future years.
But Obama’s plan is just that — a plan. It is not a law yet.
And critics dispute whether or not the plan has any chance of passing. Some experts believe the plan stands little chance of becoming a law, whereas others believe it will pass in the next few months.
Interest rates on unsubsidized Stafford loans are set to double to 6.8 percent on July 1, 2013 unless Congress enacts another freeze on the rates. If Congress does not pass another freeze, borrowers are predicted to owe a significant amount more.
According to a U.S. Public Interest Research Group report released Tuesday, the millions of students who owe debts on these loans will be forced to pay $1,000 or more per year.
At the very least, even if the interest rate aspect does not pass, it could still open up dialogue about the student loan debt issue. It could begin congressional debates about unique ways to reform the student loan program and how to reduce the national student debt figure.
Mortgage loan interest rates relaxed this week after a recent surge according to reports provided by loans.org.
For the week ending July 3, 2013, the 30-year fixed-rate mortgage (FRM) averaged 4.19 percent. This was a decrease from 4.34 percent seen last week.
The 15-year FRM averaged 3.26 percent, a decrease from 3.38 percent reported last week.
The 5/1 adjustable-rate mortgage (ARM) interest rate averaged 3.22 percent, a small decrease from last week’s rate of 3.29 percent.
All three rates have calmed since the surge seen in the previous two weeks. The rapid increase was caused by a Federal Reserve Bank of New York (Fed) announcement stating that the Fed will likely reduce and then eliminate bond purchases. This announcement caused uncertainty and forced the mortgage loan interest rates to rise by several percentage points.
Donald Frommeyer, president of the National Association of Mortgage Brokers (NAMB), said that the rising rates will cause lenders to be more selective.
“Anytime the rates go up, it affects debt ratios,” he said.
Borrowers are approved for new mortgage loans only when their debt-to-income ratios fall within a specific lender’s spectrum. Frommeyer said that when rates increase, it eliminates those potential borrowers who are on the threshold of their debt-to-income ratios.
This week’s lower rates have helped keep homeowner affordability strong in most of the United States. A June report by Freddie Mac found that despite recent increases, the interest rates would need to exceed 7 percent in order for homeowners making the median income to be unable to afford a median price home.
“While rising interest rates will reduce housing demand, rates would have to increase considerably more before the reduction in demand for home purchases would be substantial across the country,” the report stated.
Frommeyer believes that mortgage loan interest rates will remain calm in the coming weeks and hopes that Fed chairman Ben Bernanke will make a logical decision about when to reduce and then stop bond purchases.
“If this is done too quickly, it is going to hurt the home market,” he said. “If you raise the rates too high, you are going to be right back to where they were in 2006 and 2007.”
JPMorgan Chase and Co., the largest bank in the United States, is exiting the private student loan industry.
It has scheduled to cease accepting applications on Oct. 12, 2013 and will make its final private student loan disbursements before March 15, 2014.
Experts were divided on what this news means to current and future private student loan borrowers as well as the private college lending industry as a whole.
A Warning Sign and an Exit Sign
Oliver McGee, the former United States Deputy Assistant Secretary of Transportation and Vice President for Research and Compliance at Howard University, said that JPMorgan is just making a wise business decision.
He said that the bank can’t afford another probable domestic-based student loan bubble bursting after the devastating impact the subprime mortgage crisis had on JPMorgan’s balance sheet.
McGee suspects that the student loan bubble is beginning to burst right now and that JPMorgan’s exit is suggesting that the market for private student loans will contract as the bank effectively closes a section of its cash flow.
“Sounds a lot like the subprime loan department shutdowns in the large banking sector that sent similar shock waves onto Main Street back in 2007,” said McGee. “Similar spin machines of sudden subprime loan unit shutdowns occurred much the same way.”
Ever meticulous, McGee recounted that JPMorgan is actually the second major private student loan lender to leave the industry since in 2012 US Bancorp did the same. That leaves only a handful of other household names as the remaining private college loan lenders, namely Wells Fargo, Discover Financial Services, PNC Financial Services Group and Sun Trust Banks.
“Watch for some of these large private banking institutions, now facing growing risks and exposures to student loan defaults, to begin to signal they’re heading for the exit doors of the student loan gaming racket,” said McGee. “This will leave the largest player holding the student loan bubble, the federal government’s Sallie Mae, now privatized since 2004.”
Far from accepting the belief that the recession is over, McGee points to rising costs across housing, food, durable goods and services and other sectors of the economy that show the nation is still in a vice-grip of troubling economic times. Another financial bubble bursting will be far from a positive sign that the nation is “recovering.”
Bank Saves Money, Private Borrowers Lose Money
Jason Lum, a College Consultant with ScholarEdge, believes that JPMorgan’s departure from the private student loan market is going to be nothing but trouble for borrowers. He outlines what is to come on account of such a large financial titan leaving an already small market.
“A basic rule of economics kicks in: rates should go higher and lending terms should be more restrictive for borrowers with fewer players,” he said. “This applies to everything from the airlines, to software developers, and in fact to virtually any product that enters the private market. On the other hand, because federal student loans are so heavily relied upon, I think that JP Morgan’s exiting from the private student loan market will have a fairly negligible effect on the average student loan borrower.”
If Lum is right, then Congress can still influence the situation by making federal student loans more restrictive. Should it do so, he predicts that private lenders will increase their fees and grab more market share.
As bad as private student loans can be for some borrowers, Lum has a strong belief in variety and a market with multiple choices for consumers and thus thinks that JPMorgan’s exit is not something to be welcomed.
“I think what JPMorgan is realizing, as is Congress, is that there is a student loan bubble out there that is poised to explode at any moment,” he said. “Despite laws that make it virtually impossible for borrowers to dispose of student loans in bankruptcy, JPMorgan probably saw the risk involved of this bubble exploding, and concluded that it simply negates all the profitability out of this loan product.”
The Federal Government and Private Lending
Carolyn R. Tatkin, a Partner at the Frutkin Law Firm, said that private student loan lending is actually a small part of JPMorgan’s portfolio and that other lenders will be quick to fill the vacuum left by the large bank.
Their increased market share and any profits that come with it may be short-lived though since Tatkin believes that more and more borrowers will prefer the federal government’s direct lending program.
“While there is always worry when the government takes control of a market, the lower rates and flexible repayment plans have made things slightly easier on student borrowers, in spite of the continuing high cost of education,” she said. “I do not believe student loan borrowers will be impacted significantly by JPMorgan’s exit.”
Even though JPMorgan’s exit has a debatable level of impact on existing and future borrowers, one expert feels that this event was a long-time coming.
Mark Kantrowitz, Senior Vice President and Publisher at Edvisors, believes that JPMorgan’s exit from the private student loan industry was inevitable due to the ending of the Federal Family Education Loan program (FFEL).
He argues that JPMorgan lent both federal and private college loans through the FFEL, but once it ended in July 2010, they were reduced to a narrowed income stream that only came from private lending.
However, students should welcome the bank’s departure since federal student loans have more flexible repayment plans.
“They are also more available and less expensive,” he said. “So borrowers should fare better under federal loans and should always borrow federal first. I doubt there will be any change from the remaining lenders, since the change does not affect demand for private student loans by much.”
Private Lenders Still See Opportunity
Mike Cagney, CEO of SoFi, said that JPMorgan’s departure shouldn’t have much of an impact on private student loan borrowers and that federal student loans are better for undergraduates anyways. He did note that private student loans held an importance in college financing though.
“Private lenders can still add value [by] refinancing graduates, and lending to grad students in school,” he said.
Cagney sees one problem going unaddressed that could be more important that selecting either private or federal college loans: financial education.
“The problem with student loans is that there is no financial literacy to explain to borrowers how much they can borrow and expect to pay back given their career options with their school and degree choice,” he said. “ Schools have no accountability to ensure what they charge for tuition commensurates with the value of that education. Until these two issues are addressed, we can expect tuition to continue to rise well ahead of inflation and debt burdens to grow.”
In contrast to many beliefs, Cagney thinks that private student loan borrowers pay back their debt more than federal student loan borrowers. This is because private lenders conduct thorough underwriting which translates into lower interest rates for certain types of borrowers, such as graduates.
One borrower at SoFi said that private student loans even offer a better deal than federal ones.
“Initially, the federal government was my lender but I was able to get a better rate with a private student loan lender and really liked the community aspect of SoFi,” said Jose Guzman, a SoFi borrower.
Guzman doesn’t think that JPMorgan’s exit from private college loan lending will have much of an impact since the market will only get bigger as higher education becomes more and more of a necessity to survive in society, let alone get ahead.
He predicts more lenders will begin appearing on the scene in order to both offer a desired product and turn a profit from innovation, a key hallmark of SoFi that attracted Guzman in the first place.
“I chose SoFi because they are funded by investors that have a genuine interest in the success of the borrowers,” he said. “It helps that the investors are alumni from the schools as well.”
Both fixed and adjustable mortgage loan interest rates dropped at least 15 basis points this week, according to rate reports supplied by loans.org.
During the week ending on Oct. 24, 2013, the 30-year fixed rate mortgage averaged 3.96 percent. This was a decrease from 4.11 percent reported last week. The 30-year rate has not dipped below four percent since the week ending on June 13, 2013.
The second mortgage loan interest rate, the 15-year FRM, decreased from 3.14 percent to 2.98 percent.
Finally, the 5/1 adjustable-rate mortgage dropped from 2.84 percent to 2.68 percent.
Mortgage loan interest rates have improved and lowered due to September’s lackluster employment report, according to Michael Kodsi, CEO of Choice Mortgage Bank.
Last month only added 148,000 jobs, the lowest rate seen since November 2008.
The low employment, coupled with the lagging uncertainty caused by the government shutdown, could create negative housing reports in the coming weeks, Kodsi said. Although he hopes he is wrong, mortgage default rates will likely rise.
The biggest concern from the shutdown is that when people are unemployed or furloughed, they focus mainly on the essentials. These bills include gas, cellphone payments, food and electricity. For many households without a consistent paycheck, the mortgage loan payment comes in second.
Kodsi said this exact trend occurred during the housing meltdown.
“If you don’t have a paycheck coming in, how do you make a mortgage payment?” he questioned.
Despite the lower rates this week, Jorge Newbery, CEO of American Homeowner Preservation, believes the housing market is still struggling.
He said during the summer, the market turned positive after “what had been a tough market for several years.” Unfortunately, this improvement has lessened in the past few months. Properties that would have received multiple offers during the summer are now remaining on the market with no offers.
“It’s something we are used to but it’s certainly a comedown from the highs of a few months ago,” Newbery said.
Impoverished neighborhoods in Chicago that dealt heavily with short-sales, foreclosures and underwater properties are still struggling. The national upswing this past spring and summer was not seen in these areas. Newbery’s company has loans on homes below $50,000 and $75,000 price ranges. The company even bought loans that have balances of $300,000 that are secured by homes valued at a dismal $10,000.
This occurred because of fraud or over-optimistic mortgage loan brokers. Newbery said the shady lending practices which occurred in the past remain today.
“There are a lot of challenges in the immediate and foreseeable future,” he said. “To say the housing crisis is over or the market is returning to normalcy, I think we are far from that.”
The Securities and Exchange Commission (SEC) has proposed regulation that would allow for investors to buy stock in companies over the internet using crowdfunding exchanges.
If the SEC’s rules are implemented, this would allow for investors to buy stock in firms that are not large enough for initial public offerings, thus allowing people to get in on “the ground floor” of a budding startup.
This proposal from the SEC comes in the wake of the JOBS Act, which was passed last year.
“The JOBS Act opened up the opportunity to raise capital from purely the dominion of the large company into a chance for any company to raise money from the general public,” said Jonathan Frutkin, Principal of the Frutkin Law Firm.
“The SEC was tasked to come up with common sense regulations that facilitated investment into more than just large stock-exchange companies. Once regulations are finalized, you will see small businesses, that employ most Americans, with a new option to raise capital for expansion.”
By allowing average Americans the opportunity to invest in equity crowdfunding, they can participate in local companies and stimulate local businesses. Since the amount each individual can invest each year is capped, there is little opportunity of anyone being wiped out on a poor investment.
Impact on the Lending Scene
While the SEC’s proposal is great news for budding investors, it may not be good news for business loan lenders. After all, when businesses are able to crowdsource funds in exchange for equity, they may have little need to get into debt borrowing business loans that will cost interest payments over years or decades.
But not all experts are so pessimistic.
Paul Singh, the CEO of dashboard.io, said that the SEC’s decision won’t impact any businesses that are seeking business loans. This is because equity-based financing is very different than debt-based financing.
When investors buy equity in the form of stock, they do not receive interest payments from the corporation they are invested into. Instead, they own part of the company and may profit or lose their investment based upon a change in stock price. Business loan lenders on the other hand, only profit off of interest they earn on money that is lent out.
“In my opinion, most of this new capital will be directed towards the companies that have already raised money from ‘traditional’ VCs,” said Singh. “We won’t see new money going to new ventures until there’s a better understanding of the risk factors involved for everyone.”
Dr. Walter Schubert, Professor of Finance at La Salle University, said that the SEC’s proposed rules would allow startups to gain funds that they never would get from banks, such as business loans, or traditional venture capitalists. However, problems remain ahead.
“First, a lot of people will throw in savings that they probably should not invest,” he said. “Picking winners is not easy even for professionals, for less knowledgeable people it will likely be worse.”
He also explained that while some ventures will be funded by a new wave of investors and experience massive success, on average most people will lose money, prompting additional government involvement.
Past and Future
Bill Clark, President of MicroVentures, said that originally, the crowdfunding limit that companies could raise was capped at $5 million before it was determined that $1 million would limit the amount of risk exposed to investors.
“Personally, I think that $1 million is enough capital for a startup that is utilizing crowdfunding,” said Clark. “This should give them enough capital to prove their concept, get customers and go for a larger round with angel investors.”
Clark predicts that established businesses will end up using their sizable customer followings to good effect by expanding through crowdfunding. A second wave of companies will be young startups seeking capital.
Even though some of these young startups won’t pay off for investors, novice investors may still end up profiting, even from poor decisions.
“We will see a lot of people investing in startups for the first time and make mistakes based on hype and not investing for fundamentals,” he said. “As they start to learn from their mistakes they will grow as investors and make better choices which means they will be more selective.”
Non-existent or minimal changes for mortgage interest rates created some stability in the housing market this week.
Both fixed rates remained the same. For the week ending on Nov. 21, 2013, the 30-year fixed-rate mortgage flatlined at last week’s rate of 4.17 percent.
The 15-year FRM remained stable at 3.15 percent this week.
The only mortgage interest rate to change was the 5/1 adjustable-rate which increased minimally from 2.76 percent to 2.78 percent.
The recent stabilization of mortgage interest rates is positive according to Ted Ahern, CFO at Guaranteed Rate.
“When rates remain stable over a couple weeks or months, it’s a positive thing in that households and businesses can make sound decisions based on fundamentals and not have to be overly concerned with the future directions of interest rates,” he said.
Ahern said that homeowners and businesses are simply looking for stability in the fixed-income market. But it has been absent in the past six months due to mixed signals from the Federal Reserve Bank of New York. A Fed decision about reducing quantitative easing will not occur until the beginning of 2014 — creating a long-term period of uncertainty.
“People are trying to figure it out and how it applies,” Ahern said.
Other experts are worried about consistency outside of the housing market. Mike Arman, a retired mortgage broker, is concerned about the current employment rates.
“Unless people have jobs and income, they won’t be buying anything,” he said.
On a more localized scale, Arman is increasingly worried about a looming cost increase of flood insurance in Florida.
The state holds 60 percent of flood policies yet it only gets back about $4 for every $15 in premiums, Arman said. In order to make up for the loss, the cost of flood insurance in more vulnerable areas will greatly increase due to the Biggert-Waters Flood Insurance Reform Act of 2012. This Act requires that the National Flood Insurance Program (NFIP) increases rates to reflect the actual flood risk.
For homeowners in certain flood-prone areas of Florida, it will have a devastating impact on the area. Owners who are paying $300 a year will soon pay $4,000 to $5,000 per year in required flood insurance costs.
And this is not just happening in expensive areas. Arman explained that the homes most affected are older homes in the sub-$100,000 to $150,000 range. The areas labeled as flood zones will become unsellable.
A lawsuit has halted this Act, but Arman is worried it will continue in upcoming years with a vengeance.
“That’s gonna kill the housing market because nobody can afford that kind of an increase,” he said, explaining that for homes affected, they will become “unfinanceable, unsellable and unaffordable.”