Homes By Doyle: The Brentwood TN Insider

Undoubtedly, 2009 was a difficult year in real estate. Home inventories continued to pile up and a growing number of existing homeowners faced the threat of foreclosure as they experienced difficulties paying their mortgages. The government has enacted several stimulus measures to help quell these problems. The following video sums up real estate sales information since the introduction of the first time home buyer tax credit.

Since its introduction in February 2009, the IRS has estimated that about 1.4 million home buyers have taken advantage of the home buyer tax credit. Though there appears to be an increase in the rate of home purchases, and a decrease in the inventory of homes for sale, there are still huge problems on the mortgage front.

In a Wall Street Journal article entitled “Mortgage Market Continued to Fall in 3rd Quarter,” Michael Crittenden illustrates just how many Americans still face foreclosures, despite modifications to their loans. He states that for the sixth consecutive quarter, current and preforming mortgages have dropped, and nearly 30% of mortgages are seriously delinquent or in the process of foreclosure. Furthermore, only one in six of the mortgages in danger of foreclosure have received relief from loan modifications.

What are some of the driving forces behind the increase in foreclosures? 1) The national unemployment rate is hovering around 10%, and is expected to reach 10.5% before rebounding. The simple fact that homeowners have lost their income has dramatically effected their ability to pay their mortgages. 2) Nearly 1/4 of all homeowners owe more on their home than it is worth. Lenders are reluctant to provide refinance loans that extend past 100% of the current value of the home.

I think it’s safe to assume that the mortgage problems will continue until the unemployment rate stabilizes. For the time being, major national lenders, Fannie Mae and Citigroup among others, have carried out a moratorium on foreclosures through the holiday season. In her latest post “Beware Holiday Foreclosure Moratoria,” Diana Olick states that most banks typically refrain from kicking out foreclosure victims until after the holidays every year. Whether this practice is genuinely in good spirit, a PR ploy, or a measure of practicality, Olick points out that the moratorium will undoubtedly skew the numbers. Reports will reflect a definite decrease in foreclosures for December ’09, while numbers for January and February will most likely increase.