As if the housing market hasn’t been shaken enough by unstable mortgage interest rates predictions by analysts are showing that the current housing market crisis may usher a new recession in the US. Due to bad loans and shady deals the housing market has been on the rocks for the past year prompting the Federal Government to lower interest rates at least twice this year alone. Worse yet, there seems to be no end in sight in the instability which is expected to take till 2009 for the market to recover.
The movement may be slow but the investments and purchases of vacation homes and other luxury properties by foreigners continue to maintain momentum. This is providing just enough juice to prevent the hose sales market wheels from grinding to a complete halt which would mean the loss of hundreds if not millions of jobs in all sectors. A rise of 11 percent from last year’s figures from 21% in 2007 to 33% to this day, it means that the market, in that avenue anyway is still going strong. The typical vacation home buyer was in their late 40′s till early 50′s and that they were investing indeed for their vacationing needs. Bothe foreign and local buyers are still doing shopping in spite of the problems being experienced in local house sales.
People are feeling the crunch of not being able to settle their mortgage and sometimes consider moving to another city or to give up all together the house rather than face foreclosure, but is that the best option for struggling homeowners? Experts disagree for the amount of money spent to pay your mortgage would be almost totally lost and a better option would be to get your mortgage re-financed so you get a better deal rather than become homeless. Moving to another city in a another state may not be to good a choice too for the job you may have now may not hold much promise in your choice of residence.
Federal assistance is being worked out for homeowners, banks and other financial institutions hit by the market slump. The president’s acknowledgment of a need for some fixing for the financial institution is a sure sign of helplessness for the Federal reserve might be at an edge as far as economic stimulus goes. They have interfered several times since last year by injecting much needed funding into the economy. Everybody knows it yet politicians deny it, the US economy is in recession which is reflected by increased jobless statistics, low new house sales and only a little change in the existing house sales market. The economy is hanging on by a thread and the Federal government may have to push harder for reforms to fix and shorten the effects of the financial problems they have been left to fix. The financial industry is left to deal with the mess they created but they are also the worst hit industries so what goes around comes around.
No sooner that the proposal from Freddie and Fannie have hit the Mortgage crisis and after it was hailed to be the next best thing to what had happened to the sub-prime lending industry, experts from all sides are already crying foul even before they have been put in place. Why, the people from the Mortgage Banker’s Association say that the proposed code of conduct they have already made with the federal government is flawed and sketchy at best. The proposed move places Federal agencies to oversee government-sponsored industries is quite difficult and would make already tedious process harder. Lenders are barred from relying on in-house appraisals for those that are done by affiliated businesses. The whole deal would create more haze than clear up the process and many more problems would result from them as previously thought. The problem is that Freddie and Fannie have already signed the deal that is set to go into force this coming year which are only a few months off. They did not consult the industry nor it’s leaders on the move they were going to make and that they acted on their own accord without any representatives of the affected industries. All this to shield appraisers from the pressures of industry which sometimes tries to inflate home values.
The economy slowing is not helping either which is barely holding off a new ‘recession’. The government’s spending outside and internally is straining the financial resources of many and frequent rate cuts which the government does to prevent such a disaster from happening cannot go on for too long. The future for the housing market still seems bleak and an end to the problems in the money markets is showing no signs of ending. Revisions to the credit system are being put in place to safeguard the events of late 2007 from ever happening again. As for the end, only time will tell.
Many buyers are becoming aware of the fact that government seized properties cost so much less than any other houses for sale. But before buying one we need to be aware of some few things .
You must do background research on the property. The best way to do this is to browse online, for helpful sites to assist you.
A little know how in auction means a lot.
If you get the time, you might want to go for an ocular inspection of the property.
Be sure that you know the real value of the house you’re buying. You may ask an appraiser ot help you out.
Plan your finances well and make sure you have money to pay for the monthly amortization.
Be inquisitive. If you feel like something was not answered, speak up. Speak up now while you’re still evaluating the prospective property.
Its true, buying a property is often easier said than done. But knowing a few tricks like these can save you a lot of money and trouble.
House prices continue to slide with only the market in vacation homes showing movement. Rentals are on the rise but prime properties continue to decrease leaving many without decent housing. Buyers holding off till things stabilize a bit and insurance industry flaws and loopholes are patched up. Congress continues to debate on how to bring about much needed change in the regulation of the insurance industry and local state governments are getting impatient saying their actions may worsen further the problem for time is of the essence. Many still feel the country is still in recession for the Federal Reserve has showed no signs of willingness to further reduce rates to help the ailing economy.
As expected, even the title insurers are now getting to feel the crunch the sub-prime lending market left and the after-taste is sour for as less and less houses are sold, they also lose the ability or market to offer their products and services. Last year, the five companies who hold 90% of the title insurance market posted losses at around 12% and that was just as the flames were getting hot. The flame then has now become a wildfire and further losses that could go as much as 20% is expected this year making it worse for these companies. Losses in the millions have been reported as first quarter profit results are posted and the outlook does not look good. The real estates industry is feeling the strain and common Americans are too, selling off non-necessities, renting, and more are some of the trends being observed as the economy slips deeper into a state of depression.
HSBC, one of the world’s largest banks has announced that it has suffered a total loss of more $17 Billion making it one of the worst hit financial institutions by the financial woes that the US is currently facing. The company says that the loss is high but gains in the Asian market have helped a lot in easing the pain. The banks profits rose by 20% from last year allowing it to survive the extreme pressure placed on them by the sub-prime lending woes that have hit the US financial market. Their problems began whe they opted to buy out one of America’s leading lending firms a short time ago leaving them ripe for the taking and with the said huge losses in therms of their global financial markets. Mainland China is one of the biggest open markets and Asia are proving to be their apples and are hoping to move more investments out of the US into other promising areas. They are maintaining some of their assets in the US but mostly due to allow them to maintain a steady share of the market in the said country.