Why Home Prices May Keep Falling

Why Home Prices May Keep Falling
The New York Times

HOME prices in the United States have been falling for nearly three years, and the decline may well continue for some time.

Even the federal government has projected price decreases through 2010. As a baseline, the stress tests recently performed on big banks included a total fall in housing prices of 41 percent from 2006 through 2010. Their “more adverse” forecast projected a drop of 48 percent — suggesting that important housing ratios, like price to rent, and price to construction cost — would fall to their lowest levels in 20 years.

One fourth of sellers reduce asking price
Inman News

Sellers dropped their asking price on nearly one in four homes listed for sale on Trulia.com during the last year by an average of 10.6 percent, the company said today in a report identifying the markets experiencing the most and biggest price reductions.

Although Trulia's analysis did not include foreclosure properties, it showed that asking prices are being slashed more severely in areas hardest hit by foreclosures.

As interest rates rise, housing market groans
Christian Science Monitor

A jump in interest rates means the road to recovery in the housing market suddenly looks steeper.

As of Thursday, the nationwide average rate on a 30-year fixed-rate mortgage is 5.3 percent, up from 4.9 percent a week ago and 4.8 percent two weeks ago.

Widow, 85, faces foreclosure
OC Register

Rita Gillam, 85, will likely lose control of the Orange home she has owned for more than 50 years.

It is scheduled for a foreclosure auction, known as a trustee’s sale, at the civic center in Placentia today, along with 99 other properties from various lenders and loan servicers. Update: The auction date for Gillam’s home was postponed to August 4, according to a Web site that posts data on trustee’s sales in Placentia.

Changes Provide Broader Availability for Borrowers, More Flexibility for Closing Costs
Real Estate Channel

(MCLEAN, VA) -- In a move aimed at furthering the success of President Obama's Making Home Affordable Program, Freddie Mac (NYSE: FRE) today announced several changes to its refinance offering under the program. Freddie Mac's Relief Refinance Mortgage is designed to assist borrowers who are current on their mortgage payments but who would benefit from refinancing into mortgages with terms that better position them for long-term homeownership.

Once these changes are available, borrowers will be able to refinance a Freddie Mac-owned or guaranteed mortgage with any lender affiliated with Freddie Mac. Previously, borrowers had to work with the lender who currently services their mortgage. In addition, to help reach more borrowers, Freddie Mac is increasing the amount of closing costs that can be rolled into the new refinance mortgage.

Ailing, Banks Still Field Strong Lobby at Capitol
The New York Times

WASHINGTON — As he often does, President Obama took the opportunity in a bill-signing ceremony last month to remind Congress “to do what we were actually sent here to do — and that is to stand up to the special interests, and stand up for the American people.”

But Mr. Obama did not mention that the measure he was signing, the Helping Families Save Their Homes Act, was missing its centerpiece: a change in bankruptcy law he once championed that would have given judges the power to lower the amount owed on a home loan.