Lenders Beginning to Make Deals

With so many houses in the United States facing foreclosure, mortgage lenders are starting to offer favorable deals for distressed borrowers they would not have agreed to just six months ago.  This is not altruism, but a case of lenders trying to avoid being stuck owning hundreds of thousands, or even millions, of homes, according to economists, academics and other experts.

According to research by the non-profit organization the Center for Responsible Lending, there are 7.2 million outstanding subprime mortgages in the United States.  Subprime mortgages are those offered to people with weak credit histories at higher interest rates than those offered to prime borrowers — those with good credit.

The center estimates that more than 14 percent of all subprime mortgages are already in default and that 2.2 million families or individuals with a subprime mortgage made between 1998 and 2006 will lose their homes through foreclosure.  The center further estimates homeowners will lose $164 billion in equity as a result of the crisis.

In the third quarter of 2007, mortgage companies had modified the terms on 54,000 loans and had worked out new repayment plans for another 183,000, according to the Mortgage Bankers Association.

The association did not give comparative figures for the third quarter of 2006.  An official said the loan modification programs had likely expanded further during the fourth quarter of 2007.

For lenders, there are financial incentives to keep people in their homes, even if it means cutting interest rates and making less money.

When a home ends up in foreclosure, the lender becomes the owner of a property that quickly loses value, with no revenue coming in.  They are also liable to pay property taxes.

So before you lose your home to foreclosure, talk to your lender.  They may just be willing to work with you today in ways they wouldn't even think about a year ago.

When is the Right Time to Buy St Louis Real Estate?

The right time to buy St Louis Real Estate is when you are completely ready to do so . This will not be same for every person, so it is to make your own mind up. But fortunately, there are a few things which you have to consider if you are thinking about buying a home.

One important thing to remember is:   If you have no money, then it is not the right time to buy a home.

These days many people think of buying a home and they get very excited about it, but they forget about the costs which are related to buying a home.

Eventually, some things you may be able to handle, but if you don't have the money to cover bills related to owning a home now, you should not even think about buying a home.

If you really want to buy the perfect home for you, you have to take your time searching for the right one.

Buying a home without doing your homework could mean you choose a home which does not suit your needs.

The right time to buy a home is when you are completely ready financially.  This will not be same for each buyer, so make sure you take your time and do your homework.  Talk to your accountant or a qualified financial planner to see if you are financially ready to buy a home.

Pricing Your Home

Even though we're smack dab in the middle of Winter, Spring time is just around the corner.  And Spring is the time of year when the weather begins to change…and many homeowners begin to think about changing houses.  If you're going to be selling a home this coming Spring, here's some advice on pricing your home from money reporter Stacy Johnson.  (1:36)

If you have a question or comment about the video, please leave your comment below.

Home Inspections - What You Must know

So you've found the house you think you want to purchase, now you need to make certain to have the home properly inspected.  If you are planning on getting a mortgage loan, the lender will require an appraisal.  Keep in mind that an appraisal is not the same as a home inspection.  An appraisal helps the lender determine whether or not your home purchase is a smart investment, an inspection will help you find out if there are any problems with the home that need to be addressed before you complete the transaction.

If you do discover problems with the home, these issues should be addressed before you sign any agreements to purchase the home.  For example, you might negotiate a lower price for the home because of the problems it has.  Or, you may negotiate to complete the purchase only after the current homeowner has remedied the problems.

There are several different types of additional inspections you'll need to have completed before you can close on the house.  For example, the house will need to pass a termite inspection, a structural inspection, and an inspection of the well and the septic if you do not receive city services.  If the home does not pass these inspections, the lender likely will not go through with the loan.

Whatver you do, never ever ever let anyone talk you out of obtaining a complete home inspection before you hand over your hard earned money to buy real estate.

More Declines in the Housing Sector

The number of Americans signing contracts to buy previously owned homes fell more than forecast in November, signaling a further deterioration in housing.

The National Association of Realtors' index of pending home sales dropped 2.6% to 87.6, after a 3.7% gain in October that was larger than previously estimated.  The figures underscore Treasury Secretary Henry Paulson's forecast that the housing recession will continue, posing the biggest risk to economic expansion.  More stringent lending practices after the collapse in subprime lending and prospects that home prices will keep falling appear to be deterring buyers.

According to a survey of over 2,400 real estate agents nationwide, a third of planned home sales were canceled or delayed in September, October and November because of loan problems.  

Pending home resales are considered a leading indicator because they track contract signings. The group's existing-home purchases report tracks closings, which typically occur a month or two later.

According to The Wall Street Journal, the Bush administration is considering tax rebates of about $500 for households and tax breaks for businesses to help the economy avoid a recession.

What do you think?  Would such a plan as $500 tax rebates make any real difference in the effort to fight off a recession?  We'd love to hear your comment by clicking the "Comment" link below and telling us what you think.  Your email address will not be displayed for your privacy and protection.