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The Healing of the Credit Market

Lin Ennis — Sat, 24 Oct 2009 12:00:16 +0000

The credit market seems to be alive and well again as sales in the bond market continue to rise. In the first half of this year, record amounts of debt have been sold in both the U.S. and in Europe. Even year-to-date, at the nine month mark of 2009, the credit market seems to be on the mend.

With more than a trillion dollars in bonds having been issued in the U.S. and more than two trillion dollars in bonds having been issued in Europe, it seems that bond issuers are moving from a reliance on bank debt to pushing money back into the capital markets.

Investors have shown up all year for a variety of bond offerings, which illustrates there is a great deal of interest on both the supply and the demand sides for the bond issues of the future.

Some corporate bond traders have described the activity in the bond market as being on fire. No matter adjective or term used to describe whats happening in the bond market, its a positive sign for the credit market as a whole. A healing credit market may just send an elated sigh across the country (and possibly even the world).

Those doing the best in this market are the folks who've been using their homes to pay for their homes. Yes. Using the equity in their home to pay off their mortgage principal. The result? They can buy more real estate, always a good investment when entered into correctly. Watch a video presentation of how to pay off your home years sooner

Future Looks Murky for Homebuilders

Lin Ennis — Fri, 23 Oct 2009 12:00:21 +0000

Even though home sales are improving and prices are increasing, the outlook for homebuilders doesnt seem to be heading in the same direction. Moodys Investor Service, in fact, recently reported that it expects homebuilder companies numbers to decrease by approximately 8% in the upcoming year.

Moodys expects the overall housing market to find itself in a better situation, but combined with the hits the building industry has taken in the past few years, the forecast isn't so positive. The service predicts that homebuilders will still suffer an overall loss in 2010. Moodys further predicts that these losses may linger into the first half of 2011 as welleven as the market works toward recovery.

And as is often seen when it comes to adverse market conditions, things may get worse before they get better. With an increase in unemployment malingering foreclosures, further housing price decreases may be just around the cornerand for a period that is longer than what was originally expected by analysts.

Moodys and other services do expect the overall housing market to take a positive turn, but there are some obstacles it still has to overcome–obstacles that may make the recovery a more long-term than short-term process.

Those doing the best in this market are the folks who've been using their homes to pay for their homes. Yes. Using the equity in their home to pay off their mortgage principal. The result? They can buy more real estate, always a good investment when entered into correctly. Especially when prices are low. Smart investors will snap up homes they can rent as affordable housing and still make a handsome profit. Watch a video presentation of how to pay off your home years sooner.

U.S. Treasury Expected to Help Prevent Foreclosures

Lin Ennis — Thu, 22 Oct 2009 12:00:31 +0000

The U.S. Treasury is expected to join the ranks of other federal agencies launching programs to help homeowners avoid foreclosure. The official announcement was due out the week of October 19, 2009. However, some information was pre-released at the recent MBA convention.

The Treasury has named the foreclosure avoidance effort Home Affordable Foreclosure Alternatives (HAFA). (Like they hafa help, I guess.)

The primary objective of HAFA is to help homeowners avoid foreclosure. They want to do that to prevent the decimation of communities due to too many empty or abandoned houses in the area. HAFA is expected to provide incentives to mortgage servicers, borrowers and investors by encouraging short sales or deeds in lieu of rather than foreclosure on the property.

With incentives in place to help stimulate interest in the program, prevention of foreclosures may seem imminent, but the HAFA program is also expected to simplify the process for lenders to participate in alternatives such as short sales and deeds-in-lieu.

Simplifying the process should encourage more mortgage servicers and borrowers to take advantage of the HAFA. Its also expected to make the process more fair and equitable through standardization of documentation and timeframes associated with short sales and deed in lieu.

Those people who are still in their homes and paying on time may not be feeling gleeful about being better off than their neighbors. I say this because of the numbers of people I see accelerating their mortgage debt and paying off their homes years sooner than they have to. One has to think a little bit of that motivation is the contagioon of fear massive foreclosures exude.

Mortgage acceleration software makes paying off one's home earlier easier by providing prompts and accountability through Internet automation.