Recession in St Louis Real Estate?

What Happens When There is a Recession and No One Comes?

It looks like 73 out of 150 metropolitan statistical areas did not get invited to doomsday, showing increases in median existing single-family home prices from a year earlier, including 11 areas with double-digit annual gains and another 12 metros showing increases of 6 percent or more; 77 had price declines including 16 with double-digit drops.

It is believed that the Jumbo crunch last August has significantly slowed down the ability for one to purchasea in luxury & higher priced areas of the country.

NAR President Richard Gaylord says ,“Higher limits for FHA loans, which go into effect March 14, will be a big help to first-time buyers in high-cost markets.  Higher limits for conventional loans purchased by Freddie Mac and Fannie Mae will take a bit longer – when they become available, high-income, creditworthy borrowers in high-cost areas will have access to affordable and safer financing, and that will help unleash pent-up demand,” he says.

What do you think?  We'd love to get your feedback.  Just use the "comment" link below to leave us your thoughts.  Your email address will never be published here to protect your privacy.

Lenders Put a Freeze on Foreclosures

Six of the nation's largest mortgage lenders, in a joint effort to cool the raging foreclosure crisis, have agreed to temporarily stop foreclosure proceedings on homeowners who have fallen seriously behind in their house payments.

Under a program unveiled recently, legal efforts to oust seriously delinquent borrowers from their homes will be postponed for 30 days while lenders and borrowers try to work out payment options.

The effort, known as Project Lifeline, will not be confined to borrowers with adjustable rate mortgages.  So-called ARMs have recorded the highest rates of delinquencies, even as default for loans of all types have risen dramatically over the past couple of years.

Under the program, homeowners 90 days or more behind in their mortgages will get a letter from their lenders asking them to call. Borrowers will be asked if they want to stay in their homes; if so, they will be offered financial counseling.

Loan modifications are not automatically granted.  Borrowers will have to provide up-to-date information about their wages and debts.  At that point, the lenders decide whether to pause the foreclosure process.

During the moratorium, foreclosure prevention specialists will determine if there's a good possibility that a loan modification will work. In other words, will a borrower be able to regain his footing and start paying his mortgage again?

Lenders often lose money when they foreclose on and resell properties - an average of $50,000 per home. It's cheaper to work out a deal with defaulting borrowers.

St Louis Housing Slump? Homeowners Don't Believe It

Despite numerous reports showing home values in historic decline, more than three out of four homeowners believe their own home has not lost value in the past year, according to an online survey.

The survey was conducted by Harris Interactive for Zillow.com, a Web site that gives estimated home values.

The survey of 1,619 homeowners found 36% believe their home has increased in value, and another 41% believe their value has stayed the same. Only 23% believe their home has lost value.

Figures from the National Association of Realtors show that the median price of an existing home sold in 2007 fell 1.4% from 2006, the first decline in that key price measure the trade group has ever recorded.

We'd love to hear what you think.  If you're a homeowner, do you feel that your home has decreased, or increased, in value?  Leave us your comment at the "comment" link below.

Time to Think About Tax Help

We're smack in the middle of tax season again.  Many people fill out the short form, mail it in, and are done with it.  Good for you.  Lots of us have more complicated financial lives.  In many cases, those complications will be handled by a hired tax professional.  But some people really like to do their own taxes.  For you, there's plenty of help online.

When you're ready to file your federal taxes, you can do it online.  The IRS wants more taxpayers to file electronically, so it has teamed up with tax preparation software companies such as TaxCut, TaxAct, and TurboTax.

Together, they offer free e-filing services.  You must meet certain requirements to qualify for free filing.

First, your adjusted gross income must be $54,000 or less.  There are also age and residency requirements, and other criteria may apply.

Start at www.IRS.gov.  Type this address in your browser.  It is the only way to ensure you'll go to the IRS's official site.

Once there, you'll get help choosing software that suits your needs.  Then, you'll be directed to the software company's site.

The software walks you through doing your taxes.  Forget about finding the correct forms.  All you need are your financial papers.  The software performs the calculations for you.  So you're less likely to make math mistakes.

Don't qualify for free filing?  You can still find tax filing software at the IRS's site.  You just have to pay for it, along with e-filing fees.

Don't forget your state taxes!  You may be able to file those with your federal taxes.  Some companies offer free state filing.  But, in many cases, you'll be charged to file your state return.

Make sure your computer's security software is current before preparing your taxes and scan your computer for spyware and other threats.

Remember, criminals love tax season.  Watch for phony e-mail messages purporting to come from the IRS.  Just delete the messages.  Don't click links or call numbers in e-mail.  The IRS will never contact you via e-mail.

Finally, if your taxes are complicated, consult an expert.  Paying for professional help is better than facing an audit!

Counting on Higher Mortgage Limits? Be Patient

Homeowners are already calling their lenders about refinancing, and ads are pushing the idea that the congressional economic rescue plan offers the perfect time to get a loan.

But it could be weeks before consumers will be able to benefit from the mortgage provisions contained in the legislation approved by Congress.

The bill, known as the Economic Stimulus Act of 2008, will temporarily increase the limits on loans backed by government-sponsored mortgage financing companies known as Fannie Mae and Freddie Mac, and on Federal Housing Administration loans, to as much as $729,750. These loans typically carry lower interest rates.

The U.S. Department of Housing and Urban Development has up to 30 days from the time the bill becomes law to decide what loan limits apply in various parts of the country.

Rates for "jumbo" or non-conforming loans, those of more than $417,000, are more than a percentage point higher now than rates for conforming loans - the biggest spread in the past decade.

The stimulus plan also will allow the FHA to guarantee loans of up to $729,750.  Before the boom in subprime lending, FHA loans were the first choice of borrowers with damaged credit and little down payment.