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Is US Home Housing Positioned For A Rise In 2010?

Jeffrey Fisher — Sat, 05 Jun 2010 12:40:34 +0000

As we approached late 2009, we saw a glimmer of light at the end of the tunnel as home sales accelerated to new highs in more than 2 years. Many assumed that we have hit bottom in home prices with increased activity from home purchasers bidding against each other in auctions from Florida to Nevada, Silicon Valley and New York.

Not to ruin the party but Mark Zandi, the chief economist of Economy.com thinks not. He predicts that home prices may fall another 5% to 10% in 2010 with some extreme cases of 30% in places like Miami. There is a very slim chance that home prices may recover in 2011 and it is still too premature to tell. Zandi worries that the millions of troubled loans that eventually don’t get modified will pile up and convert into more foreclosures. RealtyTrac estimates that 2 million housing units in the United States are in foreclosure or bank owned. There is a clear danger that many more are likely to pile on to the inventory. Zandi is estimating 2.4 million new foreclosures in 2010. He is anticipating that banks will become more aggressive in listing more of their properties in the first half of the year. The bank’s actions of dumping more properties in the market will cause prices to tumble even more.

Currently, the property market is not able to stand on its own as it is artificially propped up by the extended first-time-home-buyer tax credit coupled with the government’s expensive purchases of mortgage backed securities (MBS). The U.S government has been purchasing mortgage-backed-securities or the bundling of home loans as of late 2008. The government purchases of these securities have helped to keep mortgage rates low and attractive. Mortgage-backed securities were once popularly sold through Wall Street to world-wide investors betting that U.S. housing will continue to prosper. These investors purchased MBS in hopes of earning a favorable return. This of course is the contrary as we are witnessing today with the demise of U.S. housing causing the market demand for mortgage-backed securities to shrink with no buyers or investors. As a result, the U.S. government stepped in to sustain the purchases of mortgage-backed securities so as to preserve low mortgage rates in an effort to prevent further hurt to U.S. home prices. By March of 2010, the U.S. government would have completed its purchase of a whopping $1.25 trillion worth of mortgage-backed-securities. There is speculation that the government may end its purchases of mortgage-backed-securities by March 2010. This may result in mortgage rates to spike by a full point. This may turn away many homebuyers as it raises the cost of buying a home.

All these factors were incorporated into Economy.com’s housing price forecast for 2010 with the consideration of local figures for income, population, interest rates and foreclosures. The result covers 100 metropolitan areas. Their 2009 projection of a 14.5% decline were quite accurate and not too far off from the actual 13.2%. According to Zandi, the hardest hit areas as he terms the ‘usual suspects’ such as Nevada, Florida, Arizona and California will experience more foreclosures. He indicated Miami was the worst market where the 2009 median home price of $183,530 is predicted to fall another 33% in 2010.

Zandi indicates the less debatable areas like the Pacific Northwest, New York and Virginia where home costs are pricey compared to rents. The better performing regions are found in the pockets of the Midwest where the rural and energy economies are stronger in places like Dakota, Kansas and Nebraska. Pittsburgh which never had a housing bubble is the sole home market that’s anticipated to climb by 0.41% in 2010.

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Mortgage Refinance Assistance Money

Staff — Mon, 26 Oct 2009 05:10:45 +0000

Mortgage refinancing is the replacement of a valid home loan agreement with a fresh home loan agreement with new terms. Refinancing is used to refer to the substitution of any debt obligation with a new loan consisting of new terms. It is normally used for replacement property loans. The cash generated from refinancing agreements is generally used to pay off the original debt. If you would like to learn more about refi programs regarding your house loan you must speak with your lender. If your mortgage company is unwilling to renegotiate terms you can also get refinancing from another lender.

Home loan is to change any of the policies of a current loan agreement. It can be helpful to reduce financing fees, reduce monthly payments, or to raise money. Because of the current real estate situation lots of struggling property owners have taken advantage of refinancing to modify aspects of their mortgages normally making them simpler to maintain. Perhaps the most common use of home loan refinancing is to lower monthly payments which provides immediate assistance to mortgage holders. Property owners who have fallen behind in their house payments and are at risk of foreclosure have much to benefit from reducing their monthly mortgage payment. Mortgage refinance is heavily used as a method to increase overall cash flow. With the current home price slump many individuals are also dealing with other obstacles including unemployment or high medical costs. For these families refinancing can provide highly sought assistance from the constant demand of overwhelming mortgage payments.

The modified aspects of a refinancing agreement should provide gains for the lender and borrower. Loan companies will only agree to a reduced regular payment in exchange for amending some other aspect of the loan. Most times the amortization time line of the loan or the rate is also changed. The refinancing eligibility review also takes into account your present economic situation and if it has been altered since you took out your initial mortgage. Your lender can help you review your present borrowing profile to determine if you may be eligible for refinancing.

Home loan refinancing has been available to home owners for many years but it is only recently that many distressed home owners have utilized it to rid themselves overwhelming loan debt. The federal government, as part of the economic stimulus plan, has decided to provide mortgage relief programs in a bid to stop foreclosures. With programs like the Home Affordable Refinance Program congress has provided money to promote home loan refinance for distressed homeowners. The cash from the program goes to mortgage companies who negotiate with struggling home owners create easier repayment guidelines. If you would like to find out more about the Home Affordable Refinance Program or believe you may be eligible for assistance you should contact your lender. They will have all the relevant information about government assistance for mortgage refinance.

Government Assistance Programs for Homeowners

Staff — Fri, 16 Oct 2009 05:17:47 +0000

Many American home owners are now going through financial distress that can be attributed to the the current economic recession. For some people their situation is so bad they risk losing their houses. To help make sure those individuals are able to remain in their houses the government has created a brand new Financial Stability plan with the goal of aiding homeowners during these difficult times. A crucial component of the strategy is the Making Home Affordable plan.

This plan is supposed to improve the whole domestic economy by quickly helping the housing sector. The aim of the program is to help about 4 or 10 million people remain in their houses by reducing monthly mortgage payments. The program utilizes 2 types of home loan restructuring programs; mortgage refi and home loan modification. The congress has committed more than $75,000,000,000 to pay for these assistance plans.

The mortgage refinance plan will be run according to the terms set forth by the Home Affordable Refinance Program plan. House loan refinance happens if a mortgage holder works out a completely new loan and utilizes the proceeds to pay down the balance of the current home loan. The Home Affordable Refinance Program program will give up to 5,000,000 mortgage holders with mortgages guaranteed by Fannie Mae or Freddie Mac the chance to refinance their loans. When they refinance borrowers can get lower regular payments,making it allowing them to keep their homes.

The mortgage loan modifications are going to be administered by the Home Affordable Modification Program.The HAMP money is supposed to assist up to 4,000,000 struggling property owners get their current loan terms altered. Loan modification is when borrowers and loan companies negotiate and change just a few aspects of an existing mortgage agreement. As opposed to refi which is a whole new loan, modification alters only one terms of a contract. This is often simpler with less requirements to deal with. By altering loan agreements to include lower monthly payments a number of mortgage defaults can be avoided.

If you are a distressed homeowner there is a good probability that you are qualified to receive home loan assistance. You may be able to lower monthly payments of an existing mortgage to prevent foreclosure through loan refi or loan modification. To find out if you are eligible for either Home Affordable Refinance Program or Home Affordable Modification Program speak with your mortgage company. They should have all the applicable info about public mortgage relief plans.

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