Real Estate Roundup: New Mortgage Rules, Bold Housing Forecast, Foreclosure Cash

House of cashHere’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

Federal officials released new mortgage lending rules last week in an effort to curb risky lending practices and make it easier for borrowers to know exactly what they’re getting into.

The new Consumer Financial Protection Bureau rules will reshape the U.S. mortgage industry, changing the process homebuyers go through to obtain home loans. Their ultimate goal: keep lenders from giving loans to borrowers who can’t afford to pay them off, which was widely blamed for the mortgage meltdown that ultimately led to the recent recession.

The rules take effect next January, but the debate over their impact has already begun. Check out articles from Inman News and The Wall Street Journal for smart summaries of the situation.

What’s the outlook for real estate in 2013?

Wall Street analysts typically are a conservative bunch, but a recent column in The Washington Post by Mark Zandi, chief economist at Moody’s Analytics, absolutely gushes with optimism for the coming year. Here’s how it opens:

“A housing renaissance has begun. This may be hard to believe after the dizzying, six-year-long crash in home sales, construction and house prices. But housing turned the corner last year, and it will take off in 2013.

“Driving this optimism is one certainty: Owning a home has never been as attractive.”

Nearly 4 million homeowners will be contacted within the next three months to receive cash payments under last week’s $8.5 billion foreclosure-abuse settlement among federal regulators and 10 large banks.

Homeowners who faced foreclosure in 2009 and 2010 will split $3.3 billion in direct payments and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. Individuals are expected to receive compensation ranging from several hundred dollars up to $125,000.

Homebuyers are staying in their homes an average of 13 years before moving out, according to a report from the National Association of Home Builders.

First-time homebuyers stay in the same home a shorter amount of time — 11-and-a-half years — compared with 15 years for homebuyers who have owned a home previously, the trade group said.

Homebuyer mobility has been declining since 2007, when a typical homebuyer stayed 12 years in the same home.

The U.S. government spends $450 billion a year on homeowners and the housing industry, including direct spending, loan guarantees, and tax breaks like the mortgage-interest deduction, according to a report from Smart Growth America, which advocates for planned growth in urban neighborhoods and for public transit.

The organization counted $2.23 trillion in federal real estate spending from 2007 to 2011: $1.36 trillion in loans and loan guarantees for residential and commercial construction, $680 billion in tax credits, and $187 billion in development grants and subsidies.

(Illustration courtesy of 401(K) 2013, via Flickr.)

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