St Louis Refinancing and Mortgage Loan: Another Housing Crash May Be Coming

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St Louis Mortgage and Real Estate News –

St Louis Finance and Mortgage Refinancing News: The Housing Crash Part II
St Louis Home Mortgage and Commercial Loans | Principal Reduction Program
877-334-0210 or 314-334-0210 | Floyd Tapia, St Louis Commercial Lending and Loan Modification

 Many experts are saying the best evidence that we're headed for a double-dip recession in housing is the quality of the mortgages during the recent period in which the housing market seemed to improve in many areas.

In the Freddie Mac review of Citigroup’s performing loans, the portion rated as “Not Acceptable Quality” was as high as 32 percent in the fourth quarter of 2009.

While this has obvious implications for

the repurchase or "put-back" liability of Citigroup, it also has broader implications for the housing market and the economy.

Keep in mind that the quarter in which Citigroup was churning out the highest amount of flawed mortgages was supposedly a good time for housing.

The median price of previously owned single-family homes in the fourth quarter of 2009 rose in 67, or 44 percent, of the 151 metropolitan areas, according to a survey by the National Association of Realtors. Sixteen of the areas posted double-digit increases.

The Case-Schiller numbers for that quarter showed U.S. home prices were trending up in 155 out of 384 metro areas.

Now there have been indications in the past that a mini-housing bubble was being built during that period.

The Federal Housing Authority (FHA), for instance, was backing some very questionable loans.

The home-buyer tax credit was allowing individuals to buy loans with no money down.

All the bad practices of the 2005-2007 bubble seemed to be back again.

And now we know that this perception was correct. Mortgage quality had fallen off a cliff.

If Citigroup's mortgages were this bad, we can expect the same level of problems at Wells Fargo, Bank of America and every other major United States mortgage lender.

What does this mean for housing? It implies that home prices may be due for a another crash, as lenders try to avoid incurring losses from mortgage put-backs by raising credit quality once again.

Much of the supposed health of the housing market may have been just another easy money illusion.

We may be able to avoid a crash if the economy improves rapidly enough to take up the slack created by the loose lending.

Alternatively, more cheap money flowing from the Fed through the banks and into shoddily underwritten mortgages, could keep the bubble inflating for a while longer (and maybe, fingers crossed, the economy will improve and rescue housing.)

And if a crash occurs it will likely not be as severe as the last one, simply because the improvements in the housing market in 2009 and 2010 were relatively modest.

But one thing seems for certain and that is much of the improvement in housing over the last two years was built on easy credit.

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When applying for any type of St Louis mortgage or refinancing, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at (314) 336-9111 and ask for Steve Swan or Doug Stahlschmidt.

Business Owners: Call us at (314) 334-0210 and retain us for one of the best commercial loan modification and principal loan reduction programs available. A principal reduction or loan modification can help if you are underwater with negative equity. As commercial lending and loan modification program consultants, Floyd Tapia and his lending and legal team can focus on bringing you innovative private lending solutions to meet all types of financing needs. We have access to the largest portfolio of private lending institutions and investor backed funding sources available. Let us turn your challenges into closings (or from being underwater equity wise) and help you get a St Louis commercial lending, mortgage or financing loan.

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