In case you haven’t heard, our nation’s banking system is in deep trouble at the moment. They are writing off billions in bad mortgages, defaulted auto loans and credit card debt. The beleaguered Federal Reserve is doing all it can and our good friends over seas — through what are known as “sovereign wealth funds” — are busily buying up large chunks of of these once proud institutions. When combined with the massive amounts of foreign capital financing our mushrooming federal debt, some of us are hearing the alarms ringing louder that we are ceding too much control of our finances to foreign governments. Ah, but I digress.
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The National Association of Realtors reported today that pending sales of existing homes fell once again in November to a level even worse than the reading recorded in September 2001, the month when terrorist attacks shook buyer confidence. That reading had been the weakest month on record before the current housing downturn.
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In the latest report on the housing market, Standard & Poor’s Case-Shiller home price index showed a record drop in October home prices when compared to price levels a year before.
According to information compiled Christmas Eve, MasterCard says retail sales leading up to the Holiday were below analysts expectations. Stores slashed prices and opened early Wednesday, hoping that they could salvage holiday sales with a last-minute splurge.
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I overheard someone during a break at a volunteer meeting I attended yesterday telling a small group of people gathered around the refreshments about this fantastic re-finance deal he got from one of the high-spending big lenders — you know, the ones running all the fancy TV ads and sending us all the junk mail. “I got a 30-year loan with absolutely no closing costs,” he beamed. “I paid off my truck and walked away with a fat check, too!”
“Great,” someone said. “Did you get a good rate?”
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Thanks in large part to the sub-prime mortgage mess, the cost of obtaining a new mortgage for “prime” customers — those who have good credit, and verifiable employment, income and assets — is going up.
Think of it as your holiday gift from your friends, Fannie and Freddie.
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With six shopping days left before Christmas, retailers are holding their collective breath in anticipation of a last-minute buying binge.
One thing is for sure: This Christmas will not be on the house (that is, paid for with home equity). Another probable outcome is any consumer spending spree could be the “last hurrah” for the nation’s economic growth when the bills start coming due.
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…You’re willing to watch your equity (down payment) evaporate over the next few years.
It’s like buying a car — it is certain to depreciate the minute you drive off the lot. Or buying stock in a company headed into bankruptcy. Neither of these is a smart financial move. Buying a house for the foreseeable is a loser with a couple of exceptions:
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In “How To Make Your Mortgage Process Smooth As Silk“, I offered advice an tips on how to prepare for a home purchase or re-finance mortgage to make the process as painless as possible. In this post, I will discuss a more complex mortgage process: the construction-permanent loan.
Building a new home is both exciting and potentially very rewarding. I have had the pleasure of assisting clients over the years with building homes of their dreams, many of whom were also able to attain instantaneous equity of 20 percent or more by the time they moved in through sound construction management techniques and market appreciation. Understanding the home construction loan process is an important first step in your home building journey.
(more…)
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In “Foreclosures At Record High,” the latest data on the foreclosure wave sweeping America paints a bleak picture likely to last for the foreseeable future. People are losing their homes in record numbers, and many more are soon to follow.
If you are faced with the prospect of losing your home to foreclosure, you must take action now. Gather information about alternatives available to you, sit down, take a deep breath, pick up the phone, and call your lender. Don’t wait — it will only cost you money and add more stress to your life. If you do nothing, you lose. No one is going to hand you a solution on a silver platter.
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Tick, tick, tick.
The bomb you hear ticking in the background is the ever-growing mountain of Uncle Sam’s debt, increasing at the steady pace of $1 million per minute, or $1.4 billion per day.
The tally is way up from $5.7 trillion when President Bush took office in January 2001 and it will top $10 trillion sometime right before or right after he leaves in January 2009.