National Mortgage News
Housing problems can be traced back to the country’s financial problems because mortgages came easily to anyone. Even if you couldn’t afford to pay for a home, just give higher wage amounts as being made and better credit issues, and then you got a mortgage. It was way too easy to obtain the loan for a home, because no one checked out the information.
A couple just had a home repossessed and immediately went to another state and got a new mortgage on a brand new constructed home. Now they can’t make the payments on the new mortgage and have filed bankruptcy. This is one of many cases that helped put the country into this financial situation.
Job losses and defaults on the mortgage payments lead to foreclosure. Treasure Secretary, Henry Paulson, said on the day he announced the Fannie Mae and Freddie Mac seizure, “The housing correction possess the biggest risk to our economy. Our economy and our markets will not recover until the bulk of this housing correction is behind us.”
After the take over of Fannie Mae and Freddie Mac by the government, four top executives of Fannie Mae resigned. Chief Business Officer Peter Niculescu, Executive Vice-President and General Counsel Beth Wilkinson, Executive Vice-President and Chief Information Officer Rahul Merchant, and Senior Vice-President for Government and Industry Relations Duane Duncan.
It is hoped that the $700 billion dollar bail out by the government will put housing back on track and that mortgages will fall back in place. Unfortunately there is no guarantee that this will get better, and it looks like it will only get worse at this point. Hearings will be held on the bail out by both parties.
“We are certainly taking credit and squeezing it tighter and tighter,” said Kevin Giddis, managing director of investment bank Morgan Keegan. “Housing needs buyers. Buyers need credit.”
It’s not as easy now to purchase a home. The easiness is what put our country into this mess.
According to the Associated Press, the housing downturn has depressed overall economic activity and pushed the country close to a recession. Thousand of construction jobs have been lost, contributing to an economic slowdown that has pushed the unemployment rate to a five year high of 6.1% in August. New home construction is at a 17 year low.
After the bail out of Fannie Mae and Freddie Mac came American International Group (AIG) rescue which gave them time to sell off assets to repay their loan in a quiet and orderly manor.
It is hoped that all this paper work back and forth will help put the housing market back on track. It won’t happen overnight, but will take awhile to see where the optional housing market belongs and where the financial market comes in. It will be a long time before real estate prices head high again.
On a 30 year fixed starting in the middle of last week, interest rates started to climb past the 6.26%. At one minute housing is affordable and the next minute you can’t afford the payments.
As many of you know Cedar City, Utah is also known as Festival City, USA. We recently had the Cedar City skyfest hosted by ABD Bank. Here are some great pictures that were taking by the good folks at 