Rising subprime mortgage defaults can add 500,000 homes to the U.S. real estate inventory according to a Bloomberg morning report. Speculation looms for New Century as they consider bankruptcy. In the meanwhile, new mortgage lending is halted at New Centrury.
Unsold home inventory shot up 5.9% in February to 3.75 million while the average 30-year fixed-rate mortgage was 6.16% in February according to Freddie Mac.
Existing-home sales 3.9% rise in sales for February. It would take 6.7 months to sell off the excess inventory of homes at the current real estate sales pace.
Subprime woes have left the housing industry in an adjustment phase with borrowers with poor credit defaulting on mortgage loans. Estimates suggest it will cut housing demand by 100,000 to 200,000 units annually.
Appealing your property taxes is done because of inequities in market assessments, which incidentally runs 40-60 percent because of constant errors in blanket re-valuations that don’t get market values right.
The only way to fight your property taxes is to get rid of all municaple elected officials that live in the fantasyland of tax and spend. By electing a culture of conservative tax cutting, budget reducing legislatures.
Property tax re-valuations, contrary to many peoples opinion, do not increase the total amount of revenue raised by property taxes. Whatever the tax bill generated by the various schools, county government and municipal governments spending programs is divided up to spread the tax property tax burden based on the market value in the open market for your home. The municipality collects the amount of tax dollars for the expenses of local government based on their expenses. If the expenses go down, so do your taxes.
One of the largely unreported white collar crimes in the mortgage business is that loan officers inflate the income of marginal buyers so they are approved to buy a home they can not possibly qualify for.
Greed on the part of the buyer for supposedly inflated home valuation and greed on part of the mortgage lender for a juicy commission. The bank regulators looked the other way, the mortgage higher ups tacitly approved the practice and now with a declining real estate market buyers are bailing out in droves. Foreclosures are rampant.
Unsuspecting investors buy these mortgage obligations from brokers assuming they bought a sound investment. For instance Goldman Sachs , one of the top sellers of C.M.O.’s (collateral mortgage obligations) for the past few years sold about $100 billion to unsuspecting investors.
With the real estate decline, the bubble popped and everyone is looking for a scapegoat.
The real cause is the mortgage scams and lack of enforcement in inflating mortgage applications at the entry level. With the interest only mortgage obligations, greed on part of all parties involved perpetuated the fiasco.
A Harvard study show a more upbeat view of the current housing market value correction than offered by most economists. All hinges on the course of employment growth and interest rates. The run up in housing demand over the years is buoyed by the huge increase of immigrants and their children and relatives. That trend should continue for the foreseeable future.
Both political parties are paper tigers when it comes to immigration reform. The situation is not like it was with most 2nd generation immigrants parents who had to go through strict Ellis Island immigration standards.
The number of foreclosed home returning to the market is having an effect on builders and investors. Home market values should continue a downward trend as the growing problem of affordability strengthens. The downward pressure on wages due to the large influx of immigrants is taking its toll. High housing cost and non-housing expenses leaves home ownership on a slippery slope.
Mortgage rates have remaind stable due to the Federal Reserve not raising interest rates. The pre-owned single family home sales market is soft this seaon. Subprime lending and adjustable rate market find many battling foreclosure because of greed for home ownership and premium interest rates. Consumers with poor credit and financial flaws put themselves and their banks in risk.
Prices are going raising as the cost of living goes up. Property values shrinking, wages and the job market is still decent. The burden of local, state and the federal government are spending money like drunken sailors and it's only the American fighting attitude that keeps the working guy/gal able to continue. We all know that consumer inflation is far higher than the 2.1 percent official CPI inflation rate. Politicians are “cooking” the books. Eventually the markets will self-correct, but will we ever get spend-thrift politicians?
