How do you feel about the economy?

The president 75 billion dollar mortgage rescue plan is on the books officially. Some believe this plan will not only fight foreclosure but will save the market form going into a much deeper recession or worse depression. Over the few weeks the president stated that the worst is yet to come. However, this week he changed his outlook completely by viewing the future with more a optimistic view.

However, what did see or discovered that made him went from seeing the worse case scenario to seeing the end of the housing crisis and massive job loss? The market is truly saying something else when you look at the news about the housing marketing which lost some more grounds this week. Also this week more jobs lost send additional workers to the unemployment line.

Economist sees these problems going continue into 2012 with additional failure of mortgages coming in 2010 and slowing down by 2012. There are commercial mortgages that is to unwind or completely blown up. Also what about the residential mortgages that the $75 million stimulus package will not help because the homeowner can not refinance or take advantage of the loan modification due the new qualifying criteria.

Today banks are increasing their credit scores requirement making it even more difficult for borrowers to meet. Also mortgage companies that usually did 85 percent of the loans in America are now going out of business or they just don’t have the line of credit to lend as normal. On the other hand government loans are increasing in their loans amount they willing to insure, which can reach $410,000 for a single family.

The greatest enemy to any single loan is Job lost or health care. Why healthcare? Well when a homeowner becomes sick and over time loose income due to taking off with no sick pay this is devastating to the family and the mortgage can easily fall behind. This is one of the concerns that the new administration is looking to solve the issue of healthcare.


So what will the verdict be when it comes to fighting foreclosure we will see. The date to focus on now is March the 4th if you are fighting foreclosure. On that day lenders will be inundated with calls for this new loan modification. Apparently the mortgage companies will be compensating by the government to process the loan modification. Also those homeowners who stay current each year will get up to a thousand dollars each year for paying their mortgage on time.

Foreclosure real estate

Foreclosure real estate Attorneys experienced their bankruptcy business slow down after the bankruptcy laws were changed by the government in favor of the credit card companies and most creditors in general. In other words the laws were now stacked against the borrower. Due to the current home foreclosure crisis the government is now amending the bankruptcy laws to allow the trustee to get some principle reduction or restructuring for the homeowner.

After this brief slow period the attorneys is experiencing once again a boom in bankruptcy filing, but now the attorneys have added the filing of a possible loan modification. Loan modification is needed because homeowners are dealing with mortgages that were created in good times with weird guidelines.

When these mortgages went bust in early part of the recession lenders counting on the increase of the equity to cover any lost sustain in a home foreclosure. However, when the housing bubble burst the opposite occurred, property values fell hard and foreclosures increased.

Real estate as always been a sure bet in the past and banks did not consider that they would take such a nose dive. Typically in normal economic environment homeowner could have use a mortgage refinance to get themselves out of trouble. However, these toxic loans pushed homeowners in foreclosure instead . Meanwhile the lenders made a plead for a bailout from the government hoping to survive this wave of foreclosures ; which they did not see this coming.

Bankruptcy was all ways an option in the past for homeowners facing foreclosure. However, now we are dealing with a different type of loans that when went bad were difficult for homeowner to handle. For example the sub prime loans came with adjustable rates that would push payments out of the reach of the homeowner. Bankruptcy could not stop that. Most of these borrowers could not refinance into a prime rate mortgage because of their credit or income data.

Another type of loans that went bust was the option arm loan which was structured with an introductory rate as low as 2.9% with a potential increase of additional 6 percent over the life of the loan. Therefore if you started with a rate of 2.9 with an index of 4.5, your effective rate would be 7.40 but you were only require to pay each month the 2.9 interest only. These option arms created a negative amount each month because the borrower was not paying the fully indexed mortgage rate each month based on the 7.40. Therefore, under the prefect conditions these loans could work but with the Libor and Treasure index going creating a run away mortgage.

Attorney’s across this country is now in demand working with homeowners fighting foreclosure using not only bankruptcy but loan modification. Filing bankruptcy has its limitation, with home equity falling. Loan modification would not only create a fix rate but increase the numbers of years to pay off the loan. Hopefully the new bankruptcy laws will allow the bankruptcy trustee to obtain such restructuring.