St Louis Refinancing Professionals Fear The Worse Is Yet To Come
Just when the average consumer thought things were possibly turning the corner, it appears that we may be heading for a double dip recession.
Both supporters and cynics have been following the Federal Housing Administration’s (FHA) decision to allow property flipping to buyers and sellers.
More and more professionals are saying that the FHA has seen the chilling, yet proverbial handwriting on the wall.
In order to prevent the worse type of situation of that being another economic crash, more properties need to be sold as quickly as possible.
And there are critical reasons for accomplishing this so called cleaning of the house.
1. While the sub-prime crisis may be showing signs of early stabilizing, the adjustable rate mortgage (ARM) crisis is just beginning to rear its ugly head.
According to one business journalist the big wave of Option ARM resets has yet to come, and given the drop in home prices, refinancing won’t be realistic.
The FHA has already anticipated the large surge in short sales for 2010 as being a possible solution.
2. Municipalities Will Be In Default – No one could have imagined the severity of cash flow problems county and township officials would be facing due to large amounts of tax defaults.
The problems that will arise is lack of funding for the counties and towns and a worse financial situation for homeowners whose property values are already underwater.
3. Commercial Real Estate Will Be Hit Hard – The commercial market will be facing the same financial crisis as its sister market suffered in the residential sector.
The second largest chain of malls has already declared bankruptcy. Obligations needing refinancing in the commercial market are totaling in the trillions.
And most of them, even with positive cash flows, are as underwater as residential mortgages. As these businesses crash, they will cause even more unemployment.
4. Loan modifications are simply not working – The St. Louis Refinancing Group news team has reported that unless and until there is meaningful principal reduction, most people getting a loan modification will stop making their payments if they are $100,000+ upside down on their home.
And that number of people who are underwater is growing by leaps and bounds. Many economists are saying look for lots of “jingle mail,” where the homeowner voluntarily sends back the keys in 2010.
The term self-eviction will be getting more and more notoriety as more and more consumers are given the option of voluntarily turning in their house keys with the guarantee that they will owe nothing nor have to pay for any future financial losses.
With the expense of foreclosures skyrocketing, more and more banks and lenders are allowing homeowners to simply walk away saving them time and money. This may also save us from another economic crash.
If you are wanting to discuss some of the best home loan options on St Louis home loans or a St Louis refinancing mortgage, visit our websites or call Floyd, Steve or Doug at 877-334-0210 or 314-334-0210.
