A recent report by the California Association of Realtors finds 67 percent of California sellers sold their homes due to inability to meet their mortgage obligation. Changes in family and employment status as well as adjustments to monthly mortgage obligations played significant roles in California’s homeowners’ decisions to sell their homes in 2009.
C.A.R. President, Steve Goddard, stated that tighter underwriting standards for refinances coupled with a decline in home equity impacted the market in 2009. “Many homeowners chose to sell last year because their adjustable-rate mortgage reset at the same time home prices were experiencing an unprecedented decline, leaving them with little equity and difficulty in qualifying for a refinance.”
On average, homes sold for $20,958 less than the original asking price in 2009. The median difference between the listing and the selling price was $32,315. The percentage of first time sellers also grew to 44 percent in 2009, a 33 percent increase from 2008, and nearly three times the amount from 2007 of 15 percent of first time sellers.
Fed Announces Interest Rates to Remain Low
Investors breathed a sigh of relief Wednesday when Federal Reserve Chair Ben Bernanke told Congress that interest rates are likely to remain low for an extended period. The economy, he said, "still requires support for recovery."
Investors see these low rates as a boon to a recovery of employment and business.
Bernanke’s announcement also took the edge off the news Wednesday that housing sales hit a new low in January.
Investors see these low rates as a boon to a recovery of employment and business.
Bernanke’s announcement also took the edge off the news Wednesday that housing sales hit a new low in January.
$1.5 billion in housing help for unemployed, underwater borrowers
President Obama recently announced a $1.5 billion program to help borrowers in states that foreclosures were highest: California, Arizona, Nevada, Florida and Michigan to fund programs to prevent foreclosure for people who are unemployed or who owe more than their homes are worth.
The money is planned to go to state agencies that can assist homeowners having trouble securing loan modifications because of second liens, as well as promote affordable housing opportunities.
However, how the effort will help people remains to be seen. The administration did not provide many details on the state agencies' programs, saying it was leaving it to them to come up with the solutions. At least three of the agencies, in Florida, Arizona and Michigan, were surprised by the announcement and are still assessing how they will utilize the money.
The move is the administration's latest attempt to fix its signature foreclosure-prevention effort, as known as the Home Affordable Modification Program, which has been widely critized for not doing enough to help distressed homeowners.
The money is planned to go to state agencies that can assist homeowners having trouble securing loan modifications because of second liens, as well as promote affordable housing opportunities.
However, how the effort will help people remains to be seen. The administration did not provide many details on the state agencies' programs, saying it was leaving it to them to come up with the solutions. At least three of the agencies, in Florida, Arizona and Michigan, were surprised by the announcement and are still assessing how they will utilize the money.
The move is the administration's latest attempt to fix its signature foreclosure-prevention effort, as known as the Home Affordable Modification Program, which has been widely critized for not doing enough to help distressed homeowners.
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