| St Louis Refinancing Professionals Fear The Worse Is Yet To Come |
| Articles - Mortgage |
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Reports are brewing on Capitol Hill that this economy may be heading into a deeper recession although millions feel the worst is over.
Reports are brewing on Capitol Hill that this economy may be heading into a deeper recession although millions feel the worst is over. The Federal Housing Administration (FHA) has been in hot water over the last 18 months but went ahead and made the decision to allow property flipping. Some are actually giving the FHA credit for making this landmark decision which may prove to be helpful to the economy. They no doubt anticipate that things are going to get worse, so they obviously need to start moving more properties as soon as possible. On the surface, there are many necessary reasons for moving this housing market forward. 1. Until the real estate market as a whole finally stabilizes, attention will have to be shown to the adjustable rate mortgage (ARM) crisis that is soon to hit. Many economists are urging the administration to seriously consider the next possible dent to hit our fragile economy that being the reset of millions of adjustable rate mortgages that won't be refinancing candidates. A solution that has long been suggested by mortgage professionals would be short sales. 2. Counties in Default - There will be hundreds of counties and small towns nearing bankruptcy due to the growing number of tax defaults and foreclosures. And when a town or county goes broke, it will put the homeowner's property even further underwater or in a negative equitable state. Definitely not good news. 3. Commercial Real Estate Will Be Hit Hard - The commercial market will be facing the same financial crisis as its sister market suffered in the residential sector. The second largest chain of malls has already declared bankruptcy. Obligations needing refinancing in the commercial market are totaling in the trillions. And most of them, even with positive cash flows, are as underwater as residential mortgages. As these businesses crash, they will cause even more unemployment. 4. Most feel loan modifications are not the answer - This is because loan modifications without meaning principal reductions are a waste of time. Most of the homeowners will once again default on their payments especially if they are upside down $100,000 or more on their home. And that number of people who are underwater is growing by leaps and bounds. Many economists are saying look for lots of "jingle mail," where the homeowner voluntarily sends back the keys in 2010. In fact, there are a few banks that have put together such a "voluntary eviction program" where the owners give back the keys to their home and if it is in good shape, will not have to compensate the bank for any future losses on the property. They feel this is cheaper than going through the entire foreclosure process and after seeing the foreclosure blood-bath, they may be absolutely correct and help the economy from another crash. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. When you are ready to apply for a St Louis lending loan, talk to the top St Louis mortgage broker and call the St Louis mortgage experts at 877-334-0210 or 314-334-0210 and ask for Steve, Doug or Floyd. |