The Wall Street Journal reports that are up 94% since last year and now may be leveling off. Whats interesting according to the article is that the default rate is down 9% from last year. Its pure speculation as to why, but realtytrak CEO james Saccacio thinks that some of the programs put in place to help homeowners may be beginning to make a mark.
Is Bush Cutting a Deal
Whats very hopeful to me is that according to MSN the Bush Administration and some of the big banks are coming close to a deal that will help keep homeowners in their homes and supply off the market.
How?
By having the major banks agree to keep those low teaser rates in place for a few more years. The banks just might go for this because some cash flow is better than none if homes move to foreclosure or default.
"An estimated 2 million of those initial low, teaser rates are scheduled to reset to much higher levels by the end of next year, pushing the payment on a typical mortgage from $1,200 per month to $1,550, an increase of $350. The concern is that many homeowners will not be able to meet the higher payments, triggering hundreds of thousands of defaults." From MSN.com
This is a good market solution that wont require the Govt to bail out homeowners and the lenders take responsibility by keeping loans rates low , buying enough time to keep them in their homes. lets hope this goes through. The Treasury Secretary speaks before the national Housing Conference on Monday. Stay Tuned...
Thanks for Reading
Howard bell
www.yourpropertypath.com
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I hope the government makes headway in helping all those people that will experience problems due to the interest rate resets. My only concern is that, everyone that I am speaking with that is on the brink of foreclosure are not there because of rate resets they are there because of bad decisions and way to easy loan qualifying.
You can not expect someone with household income of $5,500 a month to pay for a home which costs $4,000 a month with all the costs figured in, the math does not work.
Take care!
RJH