Falling Houseing Prices Continue to Rule The Economic World

August 6, 2008

When will the falling house prices finally plateau? This question is on the lips of a number of real estate market analysts and investors who are looking for the promised turnaround in a housing sector that continues to disappoint. Although regulations are becoming more stringent in the lending market and the real estate sector has seen some overall positive trends, the big factors of foreclosures and a reticent buyer attitude has continued to make property prices fall.

Some home analysts are wondering where the bottom prices are. For millions of American homeowners, the same question is being analyzed. With a stalled real estate market, homeowners are sitting tight, waiting for the storm of failing prices to past. While they wait, their home equity is slowly sliding by and the value of their home dips more and more. Many potential home buyers have decided to wait on the sidelines rather than risk selling their home for too little of a profit. And for those individuals who are in the market for their first homes, the unsteady market has played a role for these non-homeowners as well. The ability to secure a mortgage, and establish a good rate, has proven to be trickier as the market continues to spiral downward.

Last week, the National Association of Realtors stated that the median price of homes decreased 6.1% compared to a year ago. Sales from the previous month had also fallen 2.6%, which was a higher percentage than had been previously estimated by experts.

What hope lies on the horizon for home buyers and sellers alike? Fortunately, there are major housing packages that are currently in Congress that can help to turn the situation around. A beneficial package was passed by the House last week that would boost the market by assisting first-time home buyers.

However, analysts state that there are a number of factors that could make the housing market go up or continue to fall in the future. One of these factors is foreclosures. The increased wave of foreclosures has given banks a higher inventory of these properties. In turn, the banks have become eager sellers, wanting to get their foreclosed properties off the books as quickly as possible before prices fall again. However, the surplus of motivated sellers and a stale feeling coming from the potential buyers has locked a number of potential sales. As long as the lock continues, the prices on the properties themselves continue to drop down.

Rising energy and fuel costs coupled with poor mortgage situations have been to blame for the rise in foreclosures. However, so long as this trend continues, the drop in prices will follow suit. In addition, there is the question of over-saturation. During the real estate boom years, new housing developments sprang up quickly and were bought even faster. With the halt in the housing market, however, these projects are now additional surplus with reluctant buyers, leaving these homes vacant or worse, unfinished. As long as these trends continue, the prices in properties will continue to drop until more positive steps are taken.

If you are thinking how can I sell my house fast to get out from under this large mortgage, contact your local we buy houses professional. They existing in every major metro area and will give you an offer for your home. Their service is free and there is no obligation for you to accept their offer.


Will Lenders Pay for the Mortage Crisis?

May 18, 2008

If your community has been largely affected by the foreclosure rates around your home, you might be wondering how this could have happened and who will be held responsible for our real estate market mess. After all, someone must have foreseen the mortgage issues headed towards many of these former hot real estate markets. Why was nothing done sooner to prevent the huge losses?

In fact, many real estate market experts have been vocal about the negative impact of the mortgage loans. However, despite warnings, many novice homeowners or uneducated buyers have found themselves in financial quagmires that are impossible to solve. As foreclosures are rising and our economy slows, lawmakers are turning their attention towards the mortgage lenders who originally propped up the cards to watch it all fall down.

Specifically, a Senate subcommittee has been formed to investigate the possibility that mortgage lenders abused the bankruptcy code to file loans for individuals who would not have qualified for the money previously. By misusing the bankruptcy system, mortgage lenders and companies were able to impose high fees whose legality is questionable. In addition, these high fees and misuse of the bankruptcy system directly played into the foreclosure problems that many homeowners are currently facing.

In essence, the Senate subcommittee is looking into whether mortgage lenders and companies intentionally played towards people who were too ignorant or overwhelmed to truly understand what financial situation they were getting into. By concentrating too highly on the property, but underplaying the fine print in the mortgage loan, these institutions were blatantly acting fraudulently and requesting too much money from individuals who simply did not have it. Although the mortgage lenders were aware that they were placing a nearly-impossible financial situation on these homeowners, they are accused of not exercising ethic restraint by giving out these loans.

The Senate subcommittee will look into not only past actions by these mortgage lenders and institutions for penalties, but also increase the level of penalties given to those lenders who manipulate the bankruptcy law for their own financial gain – and consequent ruin of other investors.

Originally, bankruptcy laws were initiated to give homeowners with financial issues the chance to keep their homes. However, with the questionably high fees demanded by these mortgage lenders and institutions, the ability to pay off the home was impossible, despite the bankruptcy protection clause. For this reason, more and more people were permanently removed from their homes while certain mortgage lenders and institutions pocketed the money.

One reason for the subcommittee investigation comes on the heels of a sharp increase in foreclosure filings. With an increase of 112 percent since last year, lawmakers are concerned that the problem will grow even worse as many mortgages will be reset and increased this year, causing numerous people who are just barely hanging on to lose control completely. With these extra fees putting the homeowner in a worse position and having them fall even more behind, the mortgage institutions are under direct scrutiny over the legality of these fees and their execution.