The Truth Behind the Real Estate Market Recovery

Joshua Anderson, Lexington Realty Correspondent, Los Angeles

Los Angeles- While over 100,000 delinquent homeowners flocked to the NACA convention over the past week to get their mortgages modified, only about 30 percent of them were successful. The growing number of foreclosures in California is increasing dramatically and there are absolutely no signs of a slowdown.  Disgruntled homeowners left the convention looking as hopeless as they did upon entering. What lenders are not disclosing to the public is that their efforts to foreclose have been stepped up; misleading homeowners who still believe the mortgage modification program will benefit them. One woman left the convention stating that last time they were in town, about 90 days ago, they told her she would qualify the next time around, only to find out she was denied yet again.

Amidst the crisis the number of homeowners who are “underwater” has surged to 27 percent, up from 23 percent before the fourth quarter of 2010.  The situation is dire and experts predict that it will only get worse.  There are still a few homeowners who believe a temporary modification will solve the problem, but as the economy continues to decline, that possibility will soon fade.  The mortgage foreclosure moratorium has spotted several loans with faulty paperwork, but this will not solve any immediate problems and those who are delinquent will remain on the chopping block.  The overall situation could potentially regain itself within the next five years but the countries deficit puts that figure at risk. “Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean we’re getting closer to the bottom,” said Zillow’s chief economist, Dr. Stan Humphries.

Across the nation the foreclosure figures are devastating. In Albuquerque , New Mexico, one in 46 homes are being foreclosed on, which is an increase, in 2010 it was at 60.32%.

Other hard hit cities include Spartanburg, S.C., Myrtle Beach, S.C, and Savannah, Ga. Of course the larger metropolitan cities have been devastated as well with the more affluent communities like Bel Air and Beverly Hills remaining stable.

In a small effort to stabilize the housing market the Obama administration released information regarding the reform of Fannie Mae and Freddie Mac. The exact details have yet to be released but the majority of the information was in regards to the government greatly reducing its role in the mortgage market.  The Republicans have made it clear that they would like to accelerate this plan; however experts have estimated at least five years.  There are reports that Fannie, Freddie and FHA loan limits will reduce from $729,750 down to $625,000. There is nothing solidified as of yet but these may be some of the changes that will take place in the near future.

In lieu of the deplorable mortgage crisis there is one short term solution that will benefit everyone in the long run, short sales.  The process in which a lender accepts less than what’s owed on the mortgage and generally releases the homeowner of liability upon the closing of the short sale. The Home affordable foreclosure alternative or simply HAFA, is the latest in programs that benefit the homeowner with a $3,500 relocation assistance fee. Housing assist of America, a Los Angeles based firm handles these short sales in bulk and says that they have a solid system that works and it procures favorable results for all parties involved. Their site www.housingassist.com provides an in depth look into what the actual approvals look like from various lenders including BofA & Chase.

The problematic mortgage market will continue to falter as the years come, but the bottom may also be getting closer, this will eventually lead to a full recovery. But there is a lot of work that has to be done, and not just by the banks.

Comments

5 Comments on "The Truth Behind the Real Estate Market Recovery"

  1. Tony Orlando on Thu, 17th Feb 2011 5:00 pm 

    Thanks for posting the article, was certainly a great read!

  2. Tony Orlando on Thu, 17th Feb 2011 5:44 pm 

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  3. Tony Orlando on Thu, 17th Feb 2011 5:45 pm 

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  4. Tony Orlando on Thu, 17th Feb 2011 6:01 pm 

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  5. Tony Orlando on Thu, 17th Feb 2011 6:45 pm 

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