Have you been listening to the media lately?
Many are saying that the housing market has hit bottom and the economy is on the way to a recovery. To these people I say nonsense! As a mortgage banker who fields calls for refinancing and purchases every day I can tell you this is a false statement which is harboring false hope. I have my finger on the pulse and it is not good. Here is a snapshot of how I see it -- like it or not.
The stock market is still 40% off where it was just a year or so ago. And in my opinion will continue to head the wrong way. Unemployment is up. Way up! In fact it will likely go over 10% next month. That means if you put 50 Americans in a room, 5 of them will be unemployed. 1 in 5 American home owners are under water! Foreclosures continue to rise. A recent report shows that 1 out of every 4 homes are delinquent on their mortgage. If you live in a neighborhood of 50 houses, 12 of your neighbors could be facing foreclosure. Staggering!!!!
Here is my finger that is on the pulse and this is what it is telling me.
I am approving fewer loans than I did last month and the month before that.
Housing prices continue to sink at an unthinkable pace.
Credit scores continue to drop.
Income continues to drop.
Personal debt continues to increase.
So what can I do about this you ask? First of all, hunker down. Change your spending habits. Stop using credit to purchase things. Cut up your credit cards. Call your creditors and ask if they have any programs to help eliminate your debt faster and less costly. Pay your mortgage, autos, electric and feed your family first! Do not let unscrupulous creditors and collection departments bully you. And finally this may come as a shock to you hearing this from a mortgage banker, do not open a line of credit or a second mortgage. If at all possible, do not consolidate your bills into a new mortgage and eat up the remaining equity in your house. These may be moves you never recover from.
In my opinion, this country is in for a more serious economic crisis than most so called experts have ever predicted. I see this stuff every single day and I am living this nightmare right along with you. My mission is to provide you with honest answers to your questions. Possibly selling your home and moving “down” makes the most financial sense. Maybe, walking away from your house or negotiating a short sale makes the most sense.
Seek high quality advice and a get a complete credit check up from someone who has a heartbeat and NOT a dollar sign in mind. It may be the most important move you ever make.
Mortgage rates this week should be -- HIGHLY VOLATILE
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