A Silver Lining In The Cloudy Mortgage Mess

It's a cloudy and murky storm brewing over the once clear skies of the real estate market. Foreclosures increased more than 75% in 2007 with over 2.2 million foreclosure filings nationwide.

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?

What's Your Opinion On The Economic Stimulus Package

Well looks like Congress is getting the message and seriously getting ready to do something about the looming economic down turn. The Democrats and Republicans have found something they can agree on for once - a need for economic relief, especially in the housing market where states like California and Florida have suffered 20-30 percent declines in home values and home owners are losing their proverbial shirts.



Unfortunately what they haven't agreed on is how to provide the relief. The Democrats want to increase the loans limits available for insurance backing of FHA and HUD supported homes from a maximum of $417,000 to over $700,000. The Republicans want to have the limits raised also but somewhere in the neighborhood of $600,000. This is all part of the economic stimulus package that is being considered right now by Congress. Rest assure there will likely be an increase in the maximum amount of the home loan size for insured purposes that will be backed by the government but how much should it be?



I think it should be $700,000 or more. That way more people will be able to obtain loans that are insured by the feds and housing markets in California, Arizona etc. will be stimulated and the down slide can ultimately be stopped and the housing market stabalized. It will also provide an opportunity for more first time home buyers to have access to loans for homes that otherwise would not even be considered part of the housing inventory because of the current low loan approval amount of $417,000.



The housing industry is the main key to recovery in this current economic spin. I say increase the loan limits to the $700,000 amount or more.



What's your take on it? Talk back to me and let me hear your side of it. Get involved and talk to your representatives about this too. Now is not the time to be silent.



Give me your comments in the comments section of this blog. Have a good one.

Roy Landers -roylanders@housingamericans.com. http://www.housingamericans.com/