i have three questions about the housing market…?

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Ok, so due to the recent, and I mean within 24 hours of American Mortgage filing bankruptcy due to the market crashing in the housing industry because of Arm loans, have some questions that I need some help understanding.

1. How many people in the united states are still paying on houses?
2. What percentage of those people have adjustable arm loans from their mortgage company.
and 3. If the housing market fails, and are economy is screwed up as it is now, who is going to help out. I mean, back in the eighities, they took 5000 dollars from everyones taxes and used it to supplement the failing savings and bonds, now, we are 9 trillion dollars in debt, who is going to pay for the now 500 billion dollar housing failure?

  1. Reply
    May 4, 2011 at 3:17 am

    Ok I understand that it looks bad. Answering your questions probably won’t do anyone that much good other than to re-inforce what you already know so let’s get real here and try to give you some help instead-the truth of the matter is we are looking at loans that were sub-prime loans that are going sour. Not the normal a+ loans. So while there are a lot of them. There are people both in and out of the industry working dilligently to solve these issues! If you are one of the ones who find themselves in a bad spot and perhaps facing bankruptcy or foreclosure or both-the best advice I can offer is this-Call the bank as soon as you see a problem, ask for the loss mitigation department and explain your situation, calmly. If it is a long term problem realize sooner rather than later that you may HAVE to sell the house to save your credit. The credit is critical for the well-being of yourself and your family in the future. If you sell it even in a shortsale you may be able to actually buy another one in about a year. The lenders want a year of no lates before they will lend today. So if you can sell and get started on that year you are moving forward with your future and a wiser buyer you will be the next time. Sometimes the lessons we learn in life are learned the hard way but, those are the ones that teach us the best! It’s OK you wouldn’t be alone in this. Find a REALTOR who is experienced in Short Sales and foreclosure prevention and work with them! They will ask you to sign a form that let’s them speak to your lender on your behalf. You may still have to move but, you will have someone on your side in the process. It’s good to have a friend when you are up against that wall!

  2. Reply
    May 4, 2011 at 3:42 am

    I don’t know. It is sad. I did hear that $ 1.5 trillion dollars in ARMs are set to adjust this year!

  3. Reply
    May 4, 2011 at 4:00 am

    The housing failure wasn’t due to the economy or housing market, but to too many bad loans. I worked for a mortgage company and they would do anything to get a person a loan and as long as the person could afford the loan for 1 year the mortgage company wasn’t at risk. If a person foreclosed within a year of a loan the loan officer would be investigated and everything about the loan would be checked, but if that person went beyond a year, like they would with the ARMs, then the mortgage company is off the hook. The housing market isn’t failing, just the bad loans. There should be an investigation on the loan companies who sold the consumer a bad deal….The people buying the loans should have remembered the old saying…if it sounds too good to be true then it probably is….$ 200,000 loan for $ 585 a month…yea, right!!!!!!

  4. Reply
    May 4, 2011 at 4:42 am

    1. 10’s of Millions of people have mortgages. I don’t know that I would say 100 million (or 1/3 of the population) but it should be close to that number.

    2. A small percentage. Perhaps 1/4 of all mortgages are ARM’s and many of those are 2nd mortgages with smaller balances (and smaller payments).

    3. If the housing market fails the US economy will be in severe trouble. The gov’t doesn’t have any $ $ $ to help out and raising taxes will only exacerbate the situation. The US gov’t has too many expeditures as it is and can’t pay for everything (which is why we are in a huge deficit), so adding to the burden is virtually impossible – without raising taxes. If the US economy stumbles, so goes the world. There is little doubt that the US keeps the global economy afloat and every time we burp they feel it in Indonesia, Egypt, Spain, Russian, Argentina, China, England, France, Ivory Coast, etc. Unfortunately those nations can do little to help if the housing market tanks.

    What is happening is a giant correction. The lenders gave too many loans to people who didn’t qualify for them and now those people are defaulting. Keep this in mind: while the foreclosure/default rates are up siginificantly they do not represent anything close to a majority of borrowers. Most people are making their payments.

  5. Reply
    May 4, 2011 at 5:06 am

    little insight two years ago in the height of the sub prime market, a little bit over 14 million loans where issued in one year, out of that about half of them had the teaser rate turning into adjustable note, so potential around 7 million notes could be foreclosed upon over the next year as the new rates kick in

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