Can the mortgage crisis get even worse?
The economy is going through very rough times right now, but experts believe it will get even worse. They predict a second wave of the mortgage crisis, this second wave being even more severe than the subprime mortgage crisis. With rising unemployment numbers, housing prices going down and housing inventory going up, the circumstances are looking bleak indeed.
Across America, the housing market is far from normal. Stability isn't coming anytime soon if we look at the recent spike in inventory caused by foreclosures and homeowners sizing down. The added inventory on the housing market is causing prices to drop sharply. Seeing that many homeowners are having trouble selling in today's market, we might see another increase in foreclosures in the near future.
With the option ARM mortgage interest rates likely to go up soon, we might be seeing another boom in foreclosures in the following months.
Now, with these market trends, the interest rates of option ARM mortgages are going to increase. This will mean substantially higher monthly payments for homeowners. An extra couple of hundred dollars added to the monthly costs might be a burden that's too big for many. And selling the house is not a very realistic option in today's market.
With home prices going down, many homeowners will soon discover that they owe a large debt on an asset that isn't worth nearly as much as they believe. These facts, along with rising unemployment rates may lead up to a second stage in the mortgage crisis.
Across America, the housing market is far from normal. Stability isn't coming anytime soon if we look at the recent spike in inventory caused by foreclosures and homeowners sizing down. The added inventory on the housing market is causing prices to drop sharply. Seeing that many homeowners are having trouble selling in today's market, we might see another increase in foreclosures in the near future.
With the option ARM mortgage interest rates likely to go up soon, we might be seeing another boom in foreclosures in the following months.
Now, with these market trends, the interest rates of option ARM mortgages are going to increase. This will mean substantially higher monthly payments for homeowners. An extra couple of hundred dollars added to the monthly costs might be a burden that's too big for many. And selling the house is not a very realistic option in today's market.
With home prices going down, many homeowners will soon discover that they owe a large debt on an asset that isn't worth nearly as much as they believe. These facts, along with rising unemployment rates may lead up to a second stage in the mortgage crisis.
About the Author:
Adviseur Mijn writes articles about mortgages in English and articles about levenhypotheek and boete hypotheek oversluiten in Dutch.
posted by Debt Consolidation Loan at
4:06 AM
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