Mary Mary, quite contrary...
Thursday, February 19th 2009, 12:31PM
In my discussions with banks and lenders there are some very contrary things going on at the moment.
The key theme which seems to be coming up is that there is a growing number of “problem” lenders at all the banks. There have been reports that default rates have been increasing, as you would expect in this market, and that mortgagee sales are also rising.
While there are no official figures it will be interesting to see how bad this gets. What I do know is that many lenders are actively trying to encourage borrowers to act early if they start getting into trouble and can’t make repayments. If you act early the banks can help, but if you leave it too late then don’t be surprised if you become one of these mortgagee sale statistics.
On the other side, I am hearing stories that lenders are getting significant volumes of applications for pre-approved loans. If you can read into this it means that people with a bit of equity are gearing up to start buying property.
Having your finance in place is a good thing to do if you want to do a deal and going unconditional early is part of your strategy to lock a good price in.
No doubt these two observations fit together and the people with the finance will be the ones buying at the mortgagee sales.
My observations of the market is much of the stock being sold, particularly at auction, are the properties put up for sale by the banks.
While this isn’t great news for the vendor, I suspect it is another good sign for purchasers wanting to pick up a good deal in the market.
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