Recently, about six of the nation’s largest mortgage lenders announced that they will temporarily halt some foreclosures to allow homeowners 30 days to renegotiate their loans.
The recent pronouncement from lenders such as Countrywide Financial, which is the largest mortgage lender in Florida, Washington Mutual, Bank of America, Citigroup, Wells Fargo and JP Morgan Chase, took effect as the nation’s economy continues to slide into a deep recession, according to forecasts. by leading economists.
What is Washington doing to reverse the trend?
In Washington, the leaders of major home lenders and US Treasury Secretary Henry Paulson met to announce the launch of Project Lifeline, a program that aims to help homeowners who have at least least 90 days late on your monthly mortgage payments. However, homeowners would not qualify for the plan if they are already bankrupt; have a foreclosure sale date less than 30 days away; or bought a house as an investment; or if the property is not occupied.
The US Secretary of the Treasury noted that the project “has the potential to offer new solutions to capable and responsible homeowners who want to keep their homes.” He also added that the $168 billion economic stimulus package that President Bush recently signed, as well as the government’s housing initiatives, would help revive economic activity. However, some critics said much more needs to be done to deal with the next wave of foreclosures in the next two years.
How the plan would help affected homeowners
According to Florida mortgage industry analysts, a 30-day forbearance might help some people catch their breath, but it won’t be enough to solve the foreclosure crisis. Some economists forecast that the number of foreclosures could skyrocket to 1 million this year and next, nearly double the rate set in 2007.
Concern has grown even faster in South Florida, where the 2000-2005 housing boom has led some to buy homes they couldn’t afford, and more than 3,750 homeowners were at least 90 days behind on their payments in Palm Beach and Broward counties. at the end of December, according to data from Realestat.com. This number is nearly triple the number of homeowners who fell behind on their payments in December 2006. The Lifeline Project will benefit holders of all types of mortgages and represents an expansion of an initiative announced by President Bush in December that offers to freeze mortgages. high-risk. Mortgage rates that are scheduled to be reset to markedly higher rates for homeowners who qualify for assistance.
The Economist notes that they see little hope for rapid change in the nation’s economy. Many point out that it can be a nasty, long recession, when it’s a consumer-driven recession, and many economic signs show that a recession has already begun and could be deep.
Some also point out that the credit crunch “would be protracted and difficult to resolve, as the housing crisis is a direct hit to the consumer and also to the world’s largest cap market for mortgage-backed securities. Many are There is concern that it will take a long time to rehabilitate high corporate and consumer indebtedness, as estimated losses to the financial sector range from $400 billion to $650 billion.
http://commercial-realestate-florida.xon.us – Florida Real Estate
