More home owners are feeling desparate and discouraged. Some are so angry and frustrated they have started to set fire to their homes in plots to obtain insurance money to stop foreclosure and get some monetary release. Some are abandoning homes but before they leave they leave the water running and destroy portions of the structure.
The Mayor of Baltimore has sued Wells Fargo Bank claiming they have caused big damage to minority home mortage borrowers by lending them subprime adjustable rate loans the bank knew or had reason to known they could never pay.
Is this a stormy situation or what? Yes, indeed its cloudy, but like they say there's a silver lining in every cloud. I think there is one in the real estate storm that a lot of people are missing.
Here's the weather report........
- Interest rates on federal funds dropped to 3% on January 30, 2008
- Mortgage interest rates are starting to fall even lower. This prompts refinancing and helps many homeowers that can still refinance troublesome adjustable rate loans into 30-40 year affordable fixed rate loans thus avoiding the likelihood of future foreclosure
- Congress is contemplating and most assuredly will increase the loan maximum for FHA insured loans from the current amount of $417,000 to some where in the $600,000 to $700,000 maximum loan range. Democrats and Republicans agree it should be raised so its just a matter of how much. Its pretty much a done deal. Stay tuned it's coming
- Home prices are down and new home sales are at a record low.
- Home sellers are very motivated and willing to assist buyers with financing.
Thats the weather report. What's it all mean......IT'S A BUYERS' MARKET. That's the silver lining. Home buyers, especially first timers, will be a huge factor in making sure the economy weathers the present storm and getting out of the mortgage mess.
The winds of change are upon us. History will repeat itself. Out of the ruins of the real estate market the proverbial Phoenix will rise.
What's your opinion?
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