Sabbatical on Postings.

I have been posting to this blog for 2 solid years, and 3 prior years to the Article Manager at www.1stMortgages.com. In that time, I have been able to share and advise a great number of people on the chaotic mortgage market. It has been quite a ride.

But, it is now time for me to take a seasonal leave of absence. For the past 3 1/2years, I have been the Managing Director and Chief Learning Officer for Lengthen Your Stride! LLC. In this position, I develop and manage a huge curriculum of educational material. MY efforts with them have provided little time to research and report on the ongoing changes in the real estate and mortgage markets.

Due to these time constraints, I am using this final post as a 'farewell' wave. I have not abandoned this blog, but for now will take a sabbatical on posting.

House Prices Could Fall by 30%

Housing markets from Punta Gorda, Florida, to Stockton, California, will crash and suffer price drops of more than 30 percent before the housing crisis is over, a report from Moody's Economy.com said on Thursday.

On a national level, the housing market recession will continue through early 2009, said the report, co-authored by Mark Zandi, chief economist, and Celia Chen, director of housing economics.

The report paints a worsening picture of the hard-hit housing sector, which is in the midst of its worst downturn since World War II.

While activity will stabilize in 2009, it will not be until 2010 before a measurable improvement in sales, construction and pricing will emerge, the report said.

House prices are forecast to fall 13 percent from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines peak-to-trough will total well over 15 percent, the report said.

Punta Gorda, Florida, and Stockton, California, are the hardest hit markets in the U.S., with price declines from peak-to-trough forecast at 35.3 percent and 31.6 percent, respectively.

"This is the most severe housing recession since the post-World War II period," Zandi told Reuters.

These markets have been hard hit due to several reasons, namely the exiting of investors from the areas, a fair amount of subprime mortgage loans causing an increase in foreclosures and overbuilding by home builders, Zandi told Reuters.

Home sales, however, should hit a bottom in early 2008, which will mark a 40 percent drop from peak-to-trough.

http://biz.yahoo.com/rb/071206/usa_economy_housing.html?.v=3

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Nightmare Economic Scenario

Having just finished reading this article from Associated Press, I could not help to share it with my readers. It is frightening! Here are some excerpts:

In the months ahead, millions of other adjustable-rate mortgages like Colombo's will reset, giving them a higher interest rate as required by the loan agreements and leaving many homeowners unable to make their payments. Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them, some experts say, could spread from those already battered banks into the general economy.

The worst-case scenario is any one's guess, but some believe it could become very bad.

"We haven't faced a downturn like this since the Depression," said Bill Gross, chief investment officer of PIMCO, the world's biggest bond fund. He's not suggesting anything like those terrible times -- but, as an expert on the global credit crisis, he speaks with authority.

"Its effect on consumption, its effect on future lending attitudes, could bring us close to the zero line in terms of economic growth," he said. "It does keep me up at night."

Whoa, was all I could respond once I had read that. But it does not get better, as the article continues, it gets worse, much worse.

Some 2 million homeowners hold $600 billion of subprime adjustable-rate mortgage loans, known as ARMs, that are due to reset at higher amounts during the next eight months. Subprime loans are those made to people with poor credit. Not all these mortgages are in trouble, but homeowners who default or fall behind on payments could cause an economic shock of a type never seen before.

To read the entire story click here.

In my personal analysis of the mortgage markets, I had concluded that what we had seen to this point was not the bottom. I fully expect that the bottom will be seen some time in the second to third quarter 2008. I do not expect any recovery in the mortgage and real estate markets until the first or second quarter of 2009.

The economic impact that will be sustained by the country is inestimable. Homeowners will have a rough time in the next 18 months and values will be depressed until well into 2009.

Fix Your Credit

Have you found yourself paying all your bills and finding that you have little money left over? Don’t worry your not alone. We find ourselves buying what we need, paying all our bills, and still struggling to get by. What happens when you get behind on bills because of a family emergency, this is one reason you might have bill collectors calling you. This is what happened to me, and I found my way out with some direction from friends and family. Figure out how much you owe on all your bills.

Payoff Your Bills

1. Put as much as can in to them each paycheck.
2. Get one loan to pay them off.
3. Cut up the credit cards.
4. Make a budget, and stick by it.
5. Cut back on buying things that are wants and not needs.

Get A Credit Report

1. Find out what your score is.
2. Find out who wants to collect from you.
3. Call your creditors and let them know your plan.

Results

1. You have paid your debts, and now you want your credit score to be better
2. Take a secured loan out for one thousand dollars.
3. Pay on the loan for a year.
4. Take out another loan for fifteen hundred dollars, this time not secured.

Normally what happens when you take out the secured loan and pay it off is you gain trust with your bank.


Three Years Later

1. It is time to get another credit report.
2. After paying off the bills, and paying off your loans, it’s time to smile.

Your hard work will pay off with better [tag] credit scores [/tag] . No it’s not going to be easy, but you can do it and when you do, email me with some of your success stories and I will put them on my site. It's your credet....

The end is NOT near!

"In the next six months, one year, two years, the problems in the mortgage market can cause a lot of problems with consumers and hurt buying power in the United States,” Billionaire investor Warren Buffett said at a press conference.

Mr. Buffett has sobering words for consumers and investors who hope that the end is near for the subprime crisis — it’s not. Nevertheless, he did suggest that, "overall, the economy will make progress.”

Housing Sector Stabilizing?

Here's the economic outlook according to Simon Kwan of the San Francisco Fed. The bottom line is that:

There is little evidence that the ongoing weakness in the housing sector is spilling over to the broader economy, and there are some tentative signs that the housing sector may be stabilizing. Furthermore, there appears to be a fair amount of strength in both consumer spending and labor market developments. Thus, the current economic slowdown seems like a well-timed opportunity to bring the somewhat elevated inflation down to a more acceptable level.

Based on all available information, real GDP growth during the current quarter is likely to be at just under 2 percent at an annual rate. As the drag on the economy due to housing gradually disappears, economic growth is expected to pick up slowly in 2007, but seems likely to remain at a below-trend rate of about 2.5 percent.

Existing-Home Sales Fall To Record Low

Sales of existing U.S. homes sank to a record low in September, part of a slew of bad news Wednesday that sparked renewed fears about the economy and hopes for aggressive Fed action.

Home resales fell 8% to an annualized 5.04 million last month, the lowest since the National Association of Realtors began tracking combined home and condo sales in 1999. Economists had expected sales to fall to 5.25 million.