The reality of the mortgage ‘meltdown’ has affected almost everyone. Even if you didn’t refinance or obtain a new mortgage during the 2004-2005 mortgage frenzy, the resulting foreclosures for those who did get into risky mortgages is indirectly causing the value of your home to be reduced in many areas.
Realtor Karen Highland from Frederick, MD recently wrote an very enlightening and interesting article about the Realtor’s perspective of the meltdown The Mortgage Meltdown: A Realtor's Perspective. Karen pointed out that the main culprit was the subprime mortgage in addition to the political climate. She also Identified the accomplices that include The Real Estate Boom and Bust, Securitization, Credit Rating Agencies, Fannie Mae and Freddie Mac, and The Community Reinvestment Act. Karen did a lot of research to write her article and it would be worth your time to review Karen’s article for the details.
So, where do we go from here?? Well, obviously the lenders have again tightened their lending standards, the political environment is shifting as the new administration soon will take over, FHA loans are gaining popularity (they are a great resource for first time homebuyers), Fannie Mae launched a pre-approval pilot, which began on December 19, 2008 with the intention to speed up the short sale process and the FBI is investigating several of the mortgage related crimes. It remains to be seen how the ‘bail out’ will stimulate the mortgage and real estate market. The good news is that the historically low interest rates and reduced home prices are stimulating the previously stagnate real estate market. Home foreclosures and short sales account for many of the current sales activity.
Hopefully, we are all ‘smarter’ from this painful experience and will learn from our mistakes.
Gary and Claudia Scott
Real Estate Agents
toll free 466-464-2140
