Las Vegas Mortgage Loans and Foreclosures
LAS VEGAS FORECLOSURES AND BERNANKE
Fed Chairman Ben Bernanke today put forth some new ideas on how to prevent homeowners from falling into foreclosure. Bernanke notes that lenders have increased their efforts toward “loss-mitigation” but he believes that more can be done.
He went as far as saying that lenders should “reduce the amount of the loan to provide relief to a struggling owner.” Bernanke stated that “Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure.” He indicated that “with low or negative equity in their home, a stressed borrower has less ability — because there is no home equity to tap — and less financial incentive to try to remain in the home.”
This would be a very tough sell to the lenders. Would they be pressured to write down the principal again in the future if housing prices continued to fall? Would the lender then share in any equity increase going forward?Lots of questions, but at least someone is thinking. The lenders are getting hurt due to the loan programs that they made available. The borrower is getting hurt because of a real lack of understanding the loan program that he signed off on.
We should be requiring our high school students to acquire the knowledge necessary to make decisions on home loans, as well as, understanding what and how credit scores work.
On the Mortgage Rate front, rates on 30 year fixed rate conforming loans have stayed pretty much the same. Three and Five Year ARMS are getting much better. It seems as though investors are not so concerned with the short term. They are worried about inflation and they are demanding higher rates on thirty year mortgages for that added risk.Here is a link to Conforming Mortgage rates for today.
Mark V Clawson 702-351-7912
