Mortgage Rates are Falling

by Nancy Woodward

Long term mortgage rates are now falling. This is the first time since 2005 the've been at Monday's level.

Quicken Loans Chief Economist, says mortgage rates are benefitting form the volatility of the stocks when compared to the security of bonds. When the stock market is in a period of fluctation, investors tend to look for safer places to put their funds - like Treasury Bonds.

This could mean more sales of homes as consumers are more likely to find financing at lower rates.

Builders have been giving away a lot of goodies - like granite countertops, no cost closings, price cuts and more in an effort to improve their sales positions. Many large firms believe they need to cut costs to prevent more sales of foreclosed homes.

The market is in a constant fluctation stage - I prefer to wait a bit before jumping in.

Phila housing market slows and foreclosures increase.

by Nancy Woodward

Housing prices in Philadelphia feel slightly. An analysis by a Wharton economist shows home values in Philadelphia falling last quarter for the first time since the first quarter of 2003.

During this time, the foreclosure activity surged. This will create a $223 billion drop in property values overall. The decline in the area has a direct correlation to the fact that Phila was late reaching the boom and is, consequently, late to bust.

The Center for Responsible Lending estimates that roughly one in three households will see their equity value declining while mortages taken in 2005 and 2006 reset (arms) at much higher interest rates. This will, of course, increase the number of foreclosures in the future.

In the future, it will be very difficult for homeowners who are in this sector to purchase homes again. While the housing market in the nation declines, Phila is one of the cities with a lesser decline.

Seek help and guidance if you are experiencing a financial problem. Your lender may work with you.

Housing and Credit Markets affect each other

by nancy Woodward

The stock market is sliding downward. The sad state of the banking sector and less than great hews from home builders has pushed the stock market further down the hill.

Economists fear the results of the collapsing housing market and credit problems will reduce economic growth in the final quarter of the year.

This can also cause a decline in the first quarter of 2008. They are hoping that consumers do not cut back sharply on spending.

The decline in housing combined with declining home values and credit reductions could make consumers wary of spending future dollars.

Are we headed for a Recession?

by Nancy Woodward

Consumer spending accounts for two thirds of the economic activity in the nation. Last year, payrolls grew by 189,000 a month. this year the number is closer to 125,000.

Spending power is definitely eroding. This is caused in part by rising energy costs. Since tigher lending practices now pervail, homeowners will be less able to drain the equity in their home and increase their spending power.

You should consider your entire financial position prior to seeking additional funding. Should inflation continue to rise, it is possible we will see a recession.

As usual, I recommend you do your due dilligence prior to making significant changes to your financial situation.

Short Sale - What happens afterwards?

by Nancy Woodward

When real estate is sold, normally there is a profit for the buyer. When the buyer has less equity than the current selling price of the home, it is necessary to do a short sale to avoid foreclosure.

This definitely leads to tax consequences for the seller. They may owe taxes to the government on the amount that was forgiven by the lender. This can be acapital gains.

Many of the homeowners I have spoken to in an effort to help them - don't understand or believe this concept. They tell me ' other investors don't tell me this'.

You should make yourself aware of this situation and how the process actually works. The lender has several ways of handling the deficiency:

1. They can attempt to collect this amount from the seller

2. They can require the seller to sign a promissory note.

3. They can just cancel this amount.

Now we need to see how the IRS handles this process. They consider any amount of mortgage debt ordinary income once it is forgiven. This means income taxes will have to be paid.

More to follow --

Foreclosures in Atlantic County

by Nancy Woodward

Foreclosures in the south jersey area in the third quarter declined seven percent. Unfortunately forclosures in Cape May County rose thirteen percent during the same period.

These numbers are still below the state average of sixteen percent and the national average of thirty percent.

Realty Trac Inc. calculated the numbers. They are a tracking firm based in Irvine, California with a major presence on the internet.

I have used the site to find foreclosures in the New Jersey area.