For those that have been reading this blog for a while, you probably remember me writing about the housing market here in the US a few weeks ago. Yet, here I am again blabbing about it. Wanna know why?
I was watching Katie Couric’s show earlier tonight and she featured the current state of the housing market in the US. For all of you out there that’s paying attention about what’s going on with our economy, you must have heard about big concerns of Analysts about the country going into recession.
We are such in a big hole right now. And one of the biggest contributor of this is how the housing market is doing. In the whole of the US(and New York is surely one of them), there’s 2 million people, I repeat : 2 million homeowners, facing foreclosures. The housing market is down, and the booming housing market is history! THE HOUSING BUBBLE HAD BURST!
A lot of people that dived and get suckered into buying homes 3 years ago didn’t even know what they were getting into. Now they admit, they were naive enough to understand and read what they signed for. Let’s face it, many must have been really not qualified to even take out a mortgage. For how else do one think that they are highly regarded by the lender if first of all, they were only approved for a mortgage with a fixed rate of interest that ends after 3 years. Which means, they only have a fixed rate for 3 years, what happens after that is something in question, and the worst case would be an adjustable rate mortgage that fluctuates.
A well regarded borrower or a mortgage applicant, should be able to get approved for a fixed interest rate for the life of the loan be it 15 years or 30 years. The variable rate after the fixed rate period is something that’s scary. And that’s the reason why a lot of homeowners now are defaulting on their mortgage payments. A lot of banks and lenders have closed because they can no longer absorb the cost of doing business with no money coming in. And when businesses close, a lot of people are affected because of loss of employment.
I just hope we get out of this soon. But as Suzy Orman says, it’s gonna take a while and it won’t be easy. My heart goes out to those who are in this dilemma right now. May you find comfort and enlightenment…
This is it for today… in My World.