HR 5872, which passed the House of Representatives last week, increases FHA’s commitment authority for its multifamily insurance programs by $5 billion for the remainder of the fiscal year. While HR 5891, which passed the House of Representatives July 30, will permit FHA to increase its single family annual premiums, raising the statutory cap from 0.55 percent to 1.55 percent. Essentially, HR 5872 saved the ability for FHA to issue commitments for the remainder of the current fiscal year. Although HR5891 will cost more money to the single family consumer, it is believed this increase will perpetuate FHAs ability to become self sustaining and help to stabilize the housing market. At this time it is unclear what specific impact these changes will have on the Stockton real estate market and the number of future Stockton short sales.

About 4.5 % of mortgages in the greater San Francisco Bay area are at least 3 months behind in mortgage payments and not yet in foreclosure. This default limbo is different from other real estate crashes because previously there were fewer troubled loans which meant the banks moved quickly on those who fell behind on payments. Today with so many homeowners underwater, lenders just can’t keep up or are purposely avoiding foreclosures in fear of flooding the market with homes. Some underwater homeowners have used the lender default limbo to their advantage deciding to simply stop making payments on their mortgage. Instead using the foreclosure limbo time to save money rather than pour it into a property that may never gain equity. It is all bad news for homeowners causing market instability that could last for years.