 |
| 30 Yr Fix |
6.10% |
0.01% |
| 15 Yr Fix |
5.78% |
0.01% |
| 1 Yr ARM |
5.12% |
-0.04% |
| 5/1 ARM |
6.00% |
-0.02% |
| 30 Yr Tres |
4.31% |
0.15% |
| Fed Prime |
5.00% |
-0.25% |
|
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Fed's Rosengren Says Housing Still Adding "Significant Uncertainty" to Economy
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The sharpest drop in housing prices in 50 years poses a "significant" risk to the U.S. economy, but the Fed's rate cuts should be felt in the second half of the year, according to one Fed official on Friday.
Boston Fed President Eric Rosengren said the U.S. housing market is a small part of GDP but the slump, the effects of which are widespread, may last longer than anticipated.
"Previous periods of real estate problems have taken significant time to be worked out, with foreclosures remaining elevated well after their peak," he said. "The current foreclosure problem has been exacerbated by the difficulties related to many of the problem loans being held in securities."
Rosengren said the extent of the housing problem "is highly dependent on the outlook for the economy and the future path of housing prices," adding that the aggressive monetary and fiscal policy actions will help mitigate some of the downside risks.
"These policies will likely result in some pick up in economic activity in the second half of this year, which should help to stabilize the housing market," he added.
Rosengren said it is important for servicers to help economic growth by making loan modifications where appropriate.
Rosengren explained the economy is experiencing challenges on multiple fronts, but core inflation is contained, the unemployment rate is at 5% and the economy continues to grow. "These relatively benign outcomes to date are at least partly the result of recent monetary and fiscal policy actions taken to mitigate some of the problems facing the economy," he said.
By Patrick McGee and edited by Nancy Girgis
©CEP News Ltd. 2008
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Comments (5)
| I am not naming names right now due to the legality of the situation. I can tell you all that our situation is not exactly like everyone else's. We have a lot of equity in our home and the mortgage is way under by a significant amount. Here again, we took some bad advice from some predatory lenders promising us this and that, lower interest rates, lower payments, oh come back next year and we will do you again. Yeah, they did us again allright because they knew they wanted to steal our house from us because of the amount of equity. It is as plain as the nose on your face!
Does anybody out there have any business ethics these days? |
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| Above Posted By:
Anonymous
| Mon, 2 Jun 2008 10:11:28 EST |
| What mortgage company are you referring to that didn't offer loan modification? |
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| Above Posted By:
Anonymous
| Mon, 2 Jun 2008 07:49:25 EST |
| If I was the lender and was about to take a big loss. I would lower the loan amount to 90% of current market value and reduse the interest rate to 5% interest only for the first 60 months. If the home owner does not agree to stay in the home after making this last attempt then I would Foreclose as soon as possible and then move on. Many Home owners are willing to stay in their home even though it is worth far below market value. Don't forget they do have some money allready invested in the home. If payment is to high then they can not afford to stay. The next thing the home owner does is look at the value of the home. Then they look at how much time it would take them to recover enough to buy a much lower priced home. Many Lease to Own for the next 2-5 years knowing it will take that long for their credit to repair and have enough value in equity growth to qualify for the home loan. These are tuff times. If I was the investor I would get involved with every home owner looking to stay in their home. I would do everything in my power to cut my loss and work with as many home owners I could. Some times taking a small loss is far better then paying out more money to recover from a loss. This happens when the investor is forced to forclose and then sells on the Court House steps. Many times the home sells for far below the loan amount and the loss becomes even more. Home owners are now in the perfect situation to negotiate the best possible terms ever. The lender has a choice make the terms of the loan acceptable to the home owner or take the loss it is that simple. Cut the loan servicer out of the picture and go right to the negotiator before it is too late. |
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| Above Posted By:
Douglas M. Thomson Sr.
| Sun, 1 Jun 2008 09:32:38 EST |
| Gee, this is interesting. We actually begged the mortgage company to modify our loan last summer. 3 different times they came back and said, "We can't come to terms with a loan modification". Well, guess what? We are still in our house even after they tried to illegally foreclose on us in November of 2007. Now, there they sit holding the bag, mainly because of mortgage fraud in our documents, but, we have not paid them anything since July of 2007. For over 6 months, we tried everything we could and paid what we could to get this loan back current and get us back on the right track, but they would not work with us. They would not even take 3/4 of the payment and the payments they did accept went into a suspense account and was not even applied to the loan. Because of their greed, now they are gonna loose big time and its about time!! |
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| Above Posted By:
Anonymous
| Fri, 30 May 2008 14:11:37 EST |
| SPOT ON!
I'm glad to hear him say this - finally!
We're probably 9 months from turning the corner with the servicers, then another 6 - 9 months for the foreclosure peak to trend down, and for demand to re-surge.
Hang in there, work diligently, and provide excellent service.
Cheers -
Jonathan Logan
Sr. Loan Originator
Portland, Oregon |
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| Above Posted By:
Jonathan Logan
| Fri, 30 May 2008 13:22:33 EST |
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I am very glad to see this article I own a small real estate office and everyday I have people tell me that banks are NOT helping ...
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I recall overhearing the conversation in 2005 of a young 30 something in a bar talking to a mortgage broker about his home purchas...
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In a free market society business should be allowed to prosper and more importantly to fail. Much like natural selection in the re...
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