California Loss Mitigation and Foreclosure Realities
Although in the past investors would push servicers to foreclose on those who couldn't make their payments on their mortgages, today investors are all about loss mitigation. Foreclosure, it turns out, is a costly hassle, leading to thousands and thousands of dollars of loss. Extrapolating these losses over entire portfolios, or even over the entire country, they add up to billions of wasted dollars.
Obviously, investors and government agencies don't like that, and they have begun convincing/enticing/forcing the servicing community to help discover new methods of loss mitigation, create special departments for their execution, and generally to pursue less wasteful alternatives to foreclosure. These new plans include tactics such as delicate loan modification negotiations, forbearance plans, deed-in-lieu of foreclosure, and real estate short sales. Now, every single operation features such programs, it is assumed. And even better, it works.
The huge losses of sudden foreclosures and defaults are largely a thing of the past, replaced by the smaller losses of loan mods, short sales, and other mitigating actions.
Sadly, this improvement is not without its drawbacks. Loan servicers, especially the ones in residential situations, have become bogged down in layers of litigation that come with loss mitigation, because trying to reach a workout of loss mitigation while simultaneously, and often secretly, pursuing the channels of foreclosure created a lot of angry people claiming that they were engaging in deceptive practices.
There is a court case that set a strong precedence in these matters. Richter v. Bank of America (1991) led to a court awarding Richter about three million in damages against a lender who had 'breached it's duty' to deal in good faith towards the goal of restructuring a loan, and had engaged in negligent misrepresentation by going for foreclosure while 'taunting' the borrower with promises of a loan modification. It was a landmark case, demonstrating the power of expectations for genuine loss mitigation efforts over the old foreclosure practices or unscrupulous fraud. It also made servicers nervous and hesitant to engage in loss mitigation efforts if foreclosure might be legally simpler.
However, most lenders have come to the conclusion that the risk to their interest is worth the prevention of major loss during foreclosure or short sale. And there are some pretty simple and effective steps lenders can take to protect themselves from potential risk.
The most self-explanatory, but often hardest to execute plan is to simply "be a straight shooter". Lenders who suggest that they plan to pursue loss mitigation avenues instead of foreclosure need to admit that, actually, they will be proceeding with foreclosure procedures until a document executed by both parties is produced that sets out specific, agreed-upon loss mitigation alternatives. They need to straight out document the fact that they are in danger of foreclosure, and that they should not definitely rely on loss mitigation results, and be aware that they are in very real danger of losing their homes. Lenders cannot be in the business of giving out false hope, because it can lead to more loss, and sometimes lawsuits.
วันพุธที่ 19 สิงหาคม พ.ศ. 2552
Staging Your Home to Sell in Today's Real Estate Market
Staging Your Home to Sell in Today's Real Estate Market
Selling a home in today's market takes a little extra know-how if you want to make a profit and sell your home quickly. Buyers today have numerous houses to choose from so your job is to make sure your house is "the one" they want to buy. How can you do that? Through properly staging your home to sell. Staging is a way of setting up your furniture and decorative touches to make your home more inviting and attractive to potential buyers. It is a way of making your home feel different, special and inspiring. It can truly be the difference between selling your house and not or selling it for a good price rather than taking a loss.
One of the first steps to staging your home is to eliminate clutter. You absolutely cannot have stacks of newspapers, magazines or unread mail on any surface of your home. Your home needs to look like a magazine ad or a store display whenever a potential buyer comes in to view your home. Clutter is not limited to garbage either; you also need to eliminate excess furnishings and decorations. Less is more when it comes to staging. Less furniture will make rooms seem bigger and allow potential buyers more of a clean canvas to imagine their own furniture in the home.
Another important aspect of staging is neutralizing your paint colors. You may be perfectly happy with a pink room for your daughter and a blue one for your son, but a potential buyer may have 2 daughters, 2 sons or no kids at all and want the extra bedrooms as an office and an exercise room. Putting neutral colors on the walls helps to avoid turning them off and allows potential buyers to see the homes potential rather than feeling limited by what you have done with the home.
Staging your home to sell also means having appropriate furniture, electronics and artwork in place. If you have a country home with modern furniture, things will feel disjointed and uncomfortable. If your living room furniture is from the sixties it can make your home feel old and outdated. If you don't want to buy new furniture you can always consider renting some to make the home look updated until it sells. You will likely make your money back when your home sells quickly and for the right price.
Making sure that you have every possible advantage to sell your home quickly and profitably is an important part of your real estate agent's job. Make sure that you choose a realtor who understands the importance of staging and can walk you through the steps you need to take to stage your home properly.
Selling a home in today's market takes a little extra know-how if you want to make a profit and sell your home quickly. Buyers today have numerous houses to choose from so your job is to make sure your house is "the one" they want to buy. How can you do that? Through properly staging your home to sell. Staging is a way of setting up your furniture and decorative touches to make your home more inviting and attractive to potential buyers. It is a way of making your home feel different, special and inspiring. It can truly be the difference between selling your house and not or selling it for a good price rather than taking a loss.
One of the first steps to staging your home is to eliminate clutter. You absolutely cannot have stacks of newspapers, magazines or unread mail on any surface of your home. Your home needs to look like a magazine ad or a store display whenever a potential buyer comes in to view your home. Clutter is not limited to garbage either; you also need to eliminate excess furnishings and decorations. Less is more when it comes to staging. Less furniture will make rooms seem bigger and allow potential buyers more of a clean canvas to imagine their own furniture in the home.
Another important aspect of staging is neutralizing your paint colors. You may be perfectly happy with a pink room for your daughter and a blue one for your son, but a potential buyer may have 2 daughters, 2 sons or no kids at all and want the extra bedrooms as an office and an exercise room. Putting neutral colors on the walls helps to avoid turning them off and allows potential buyers to see the homes potential rather than feeling limited by what you have done with the home.
Staging your home to sell also means having appropriate furniture, electronics and artwork in place. If you have a country home with modern furniture, things will feel disjointed and uncomfortable. If your living room furniture is from the sixties it can make your home feel old and outdated. If you don't want to buy new furniture you can always consider renting some to make the home look updated until it sells. You will likely make your money back when your home sells quickly and for the right price.
Making sure that you have every possible advantage to sell your home quickly and profitably is an important part of your real estate agent's job. Make sure that you choose a realtor who understands the importance of staging and can walk you through the steps you need to take to stage your home properly.
Financing for Investment Property
Financing for Investment Property
Understanding different types of loans, and knowing when to use them is essential for investing in real-estate. Different loans are used for different reasons. Specific loans may be used for holding property long term, and specific loans are used for short term holds. Each type of loan has a specific purpose when investing in real-estate. Learning each loans purpose is essential to ensure the right loan is being applied to the correct investing strategy. Investors can get crossed up very easily, costing them a lot of time and money. Knowing when to use a specific type of loan can be the difference between making a lot of money and losing a property to foreclosure. Below is a list of the most popular loans used by investors.
*Fixed Rate Mortgage - This loan is probably the most common loan used by average real-estate investors. It is also one of the safest to use. The interest rates are locked for the entire life of the loan. This loan usually comes in terms of 15 years, 20 years, 30 years, or 40 years. The longer the term, the lower your payments will be. Obtaining the lowest payments may sound good, but a longer term equals much more interest paid to the bank. Choose a term that will allow the most cash-flow out of your investment property. This is the perfect loan for a property that does not need rehab and is to be held as a long-term investment.
*Adjustable Rate Mortgage- This is the same type of loan that has recently been the cause for many foreclosures over the last couple years. People have been steered away from these loans. This is not a bad loan if investors understand how to use it correctly. These loans usually come in 10/1, 7/1, 5/1, and 3/1. The number before the one indicates the length of the first term. After the first term the payment will increase to a higher fixed interest rate. The first term payments may be cheaper than a conventional loan, but after it adjust the payments will significantly go up. This loan is best used for property intended to be sold before the end of the first term. The advantage is that the investor will have a low mortgage payment for the first term.
*Interest Only Loan- This loan can be used for property with a lot of equity already built into it. If investment property has a lot of equity in it, then paying down the principle and creating more equity may not be important. Accomplishing positive monthly cash-flow may be more important. For example, let's say an investment property was brought, and the seller left $50,000 in equity for the buyer. The buyer decides to rent the property and then sell it in 5 years. The investor can make cheaper payment to the bank because he is only paying interest on the property and no principle. Therefore, the investor can make more money renting the property because he is paying less in mortgage payments. The investor has $50,000 in equity, 5 years of appreciation, and 5 years of profitable rental income. In this case an investor may want lower mortgage payments, instead of paying principle and interest on property that already has equity-- and will be held for only 5 years.
*Seller Financing- This is good way to buy a property from someone who may own a property free and clear. A lot of times you can negotiate these deals with no money down and no credit check. People who own property that may need repair are more likely to agree to seller financing. Many people avoid buying property that need extensive repair. These properties are hard to sell, so the owner is probably open for different ideas of getting rid of the property. The goal is to get 0% interest and no payments. This may seem unlikely, but surprisingly some seller financed deals are structured this way. If the seller does not agree, then negotiate the cheapest rate and term possible.
*Hard Money Loan- This loan is normally used for property that is going to need repair. This type of loan allows investors to finance the money needed to buy and fix investment property. Be very careful. Be sure you are able to get out of this loan quickly. These loans are short term, and a balloon payment is due 6-12 months after the loan originates. Buy and fix the property, then refinance before the loan is due. Although, lately investors have been getting caught with their pants down. The banks have been making it harder, and harder to refinance out of these types of loans. In some cases, investors cannot refinance due to seasoning issues, and the loan becomes due before they can secure permanent financing. Before using this loan get pre-qualified for long-term financing, and be sure the investment property adheres to all guidelines and financial conditions for the new loan. In some instances, investors can walk away with money in their pocket if everything goes accordingly.
There are many other loan products on the market . Each loan is designed for a specific purpose and a specific person. Each loan has its own risk, some more than others. The important thing is to learn and understand the loan. Plan your strategy and choose the loan that makes the most sense for the strategy in place. Make it work for you and not against you.
Understanding different types of loans, and knowing when to use them is essential for investing in real-estate. Different loans are used for different reasons. Specific loans may be used for holding property long term, and specific loans are used for short term holds. Each type of loan has a specific purpose when investing in real-estate. Learning each loans purpose is essential to ensure the right loan is being applied to the correct investing strategy. Investors can get crossed up very easily, costing them a lot of time and money. Knowing when to use a specific type of loan can be the difference between making a lot of money and losing a property to foreclosure. Below is a list of the most popular loans used by investors.
*Fixed Rate Mortgage - This loan is probably the most common loan used by average real-estate investors. It is also one of the safest to use. The interest rates are locked for the entire life of the loan. This loan usually comes in terms of 15 years, 20 years, 30 years, or 40 years. The longer the term, the lower your payments will be. Obtaining the lowest payments may sound good, but a longer term equals much more interest paid to the bank. Choose a term that will allow the most cash-flow out of your investment property. This is the perfect loan for a property that does not need rehab and is to be held as a long-term investment.
*Adjustable Rate Mortgage- This is the same type of loan that has recently been the cause for many foreclosures over the last couple years. People have been steered away from these loans. This is not a bad loan if investors understand how to use it correctly. These loans usually come in 10/1, 7/1, 5/1, and 3/1. The number before the one indicates the length of the first term. After the first term the payment will increase to a higher fixed interest rate. The first term payments may be cheaper than a conventional loan, but after it adjust the payments will significantly go up. This loan is best used for property intended to be sold before the end of the first term. The advantage is that the investor will have a low mortgage payment for the first term.
*Interest Only Loan- This loan can be used for property with a lot of equity already built into it. If investment property has a lot of equity in it, then paying down the principle and creating more equity may not be important. Accomplishing positive monthly cash-flow may be more important. For example, let's say an investment property was brought, and the seller left $50,000 in equity for the buyer. The buyer decides to rent the property and then sell it in 5 years. The investor can make cheaper payment to the bank because he is only paying interest on the property and no principle. Therefore, the investor can make more money renting the property because he is paying less in mortgage payments. The investor has $50,000 in equity, 5 years of appreciation, and 5 years of profitable rental income. In this case an investor may want lower mortgage payments, instead of paying principle and interest on property that already has equity-- and will be held for only 5 years.
*Seller Financing- This is good way to buy a property from someone who may own a property free and clear. A lot of times you can negotiate these deals with no money down and no credit check. People who own property that may need repair are more likely to agree to seller financing. Many people avoid buying property that need extensive repair. These properties are hard to sell, so the owner is probably open for different ideas of getting rid of the property. The goal is to get 0% interest and no payments. This may seem unlikely, but surprisingly some seller financed deals are structured this way. If the seller does not agree, then negotiate the cheapest rate and term possible.
*Hard Money Loan- This loan is normally used for property that is going to need repair. This type of loan allows investors to finance the money needed to buy and fix investment property. Be very careful. Be sure you are able to get out of this loan quickly. These loans are short term, and a balloon payment is due 6-12 months after the loan originates. Buy and fix the property, then refinance before the loan is due. Although, lately investors have been getting caught with their pants down. The banks have been making it harder, and harder to refinance out of these types of loans. In some cases, investors cannot refinance due to seasoning issues, and the loan becomes due before they can secure permanent financing. Before using this loan get pre-qualified for long-term financing, and be sure the investment property adheres to all guidelines and financial conditions for the new loan. In some instances, investors can walk away with money in their pocket if everything goes accordingly.
There are many other loan products on the market . Each loan is designed for a specific purpose and a specific person. Each loan has its own risk, some more than others. The important thing is to learn and understand the loan. Plan your strategy and choose the loan that makes the most sense for the strategy in place. Make it work for you and not against you.
Swimming Into Trouble: The Urgent Need For Property Preservation Professionals
Swimming Into Trouble: The Urgent Need For Property Preservation Professionals
Abandoned Foreclosure Home Pools are Potential Disease Pits
Foreclosures that have been abandoned by their owners are at historic highs. For many holders of mortgages left owing a lot more than their house is actually worth, it makes more economic sense to walk away than to continue to struggle to meet huge monthly payments.
What happens after those homeowners leave, however, can turn into a horror show. A recent round-up of newspaper stories from across the country shows how these abandoned homes can quickly deteriorate - especially when the previous owners left without any concern as to the condition of the house - and accents the need for more property preservation companies to clean them out.
In Las Vegas, one of hardest-hit foreclosure cities in America, many of the empty homes also have filled pools with the potential to become disease incubators. The number of "green pool" complaints jumped from 1700 to 2800 from 2007 to 2008 - and it's expected to grow again this year.
Workers with the Southern Nevada Health District make their way from pool to pool, dumping in silvery fish to eat the mosquitoes and algae that quickly overwhelm the pool water.
It's a problem all across the Western U.S. "As the economy went south, the number of green pools went north," said Chris Conlan, supervising vector ecologist in San Diego County's Department of Environmental Health. There, they conduct weekly helicopter flyovers to spot problem pools.
Meanwhile, in Contra Costa County in Northern California, the county's Mosquito and Vector Control District subscribes to foreclosure listing services so they can scout out troubled pools. They also breed fish to put into the pools.
They would need a whole ocean of them in Maricopa County in Arizona, which contains Phoenix, another major foreclosure-ridden city. There they expect 14,000 pool complaints to surface this year - and mosquitoes. It takes about 50 fish to clean the mosquitoes out of a 400 square foot pool. But sometimes well-meaning neighbors dump chlorine into the pool - killing the fish and forcing health officials to start over.
The pool problem has become so expensive that Nevada lawmakers are considering allowing liens on properties whose owners won't reimburse them for the mosquito control.
The problem, though, is easily controllable. REO (Real Estate Owned) sellers and agents hire Property preservation and field service companies to maintain foreclosure home pools affordably and make sure this kind of health hazard never materializes.
By keeping pools in pristine condition, banks and lenders can be sure that the eventual REO sale will go swimmingly.
Abandoned Foreclosure Home Pools are Potential Disease Pits
Foreclosures that have been abandoned by their owners are at historic highs. For many holders of mortgages left owing a lot more than their house is actually worth, it makes more economic sense to walk away than to continue to struggle to meet huge monthly payments.
What happens after those homeowners leave, however, can turn into a horror show. A recent round-up of newspaper stories from across the country shows how these abandoned homes can quickly deteriorate - especially when the previous owners left without any concern as to the condition of the house - and accents the need for more property preservation companies to clean them out.
In Las Vegas, one of hardest-hit foreclosure cities in America, many of the empty homes also have filled pools with the potential to become disease incubators. The number of "green pool" complaints jumped from 1700 to 2800 from 2007 to 2008 - and it's expected to grow again this year.
Workers with the Southern Nevada Health District make their way from pool to pool, dumping in silvery fish to eat the mosquitoes and algae that quickly overwhelm the pool water.
It's a problem all across the Western U.S. "As the economy went south, the number of green pools went north," said Chris Conlan, supervising vector ecologist in San Diego County's Department of Environmental Health. There, they conduct weekly helicopter flyovers to spot problem pools.
Meanwhile, in Contra Costa County in Northern California, the county's Mosquito and Vector Control District subscribes to foreclosure listing services so they can scout out troubled pools. They also breed fish to put into the pools.
They would need a whole ocean of them in Maricopa County in Arizona, which contains Phoenix, another major foreclosure-ridden city. There they expect 14,000 pool complaints to surface this year - and mosquitoes. It takes about 50 fish to clean the mosquitoes out of a 400 square foot pool. But sometimes well-meaning neighbors dump chlorine into the pool - killing the fish and forcing health officials to start over.
The pool problem has become so expensive that Nevada lawmakers are considering allowing liens on properties whose owners won't reimburse them for the mosquito control.
The problem, though, is easily controllable. REO (Real Estate Owned) sellers and agents hire Property preservation and field service companies to maintain foreclosure home pools affordably and make sure this kind of health hazard never materializes.
By keeping pools in pristine condition, banks and lenders can be sure that the eventual REO sale will go swimmingly.
วันเสาร์ที่ 15 สิงหาคม พ.ศ. 2552
How to Find Repo Houses Early
How to Find Repo Houses Early
Purchasing real estate has really changed over the past few years, and as a result of the economy, an opportunity is presenting itself that has not been available in recent history. This opportunity is to purchase repossessed homes, often in much less than current market value. The benefits of doing so are quite varied, but it can help to get you into a home at a great price or give you the opportunity to build up a real estate portfolio and save for the future. Being able to find repo houses early, however, is the key to being successful in purchasing one.
When a homeowner is unable to pay their mortgage for one or more months, they will be in default on that mortgage. The number of months that an individual is allowed to be in default may vary from state to state and some lending institutions may also have their own guidelines. Eventually, however, the home is going to go into foreclosure and they will no longer be able to keep it. When this takes place, the bank will try to recoup their money by taking the property to auction and selling it to the highest bidder. At the time that the foreclosure occurs, it becomes a matter of public record and is searchable by anyone.
There are several different ways to find repo houses and, depending on how much time you want to put into it the research, it can get rather extensive. Most foreclosures are going to be listed in the local paper as it may be a requirement to do so. There are also some agencies which compile this information and you can go search through it manually at any time for new foreclosures that are taking place.
The easiest way of how to find repo houses, however, is to search for them on the Internet. Since the information is public knowledge, there are several websites that have compiled this information and made it searchable by county, state, city or zip code. This can help you to find the foreclosures whenever they first take place, and that can benefit you in your efforts to obtain the property greatly.
Purchasing real estate has really changed over the past few years, and as a result of the economy, an opportunity is presenting itself that has not been available in recent history. This opportunity is to purchase repossessed homes, often in much less than current market value. The benefits of doing so are quite varied, but it can help to get you into a home at a great price or give you the opportunity to build up a real estate portfolio and save for the future. Being able to find repo houses early, however, is the key to being successful in purchasing one.
When a homeowner is unable to pay their mortgage for one or more months, they will be in default on that mortgage. The number of months that an individual is allowed to be in default may vary from state to state and some lending institutions may also have their own guidelines. Eventually, however, the home is going to go into foreclosure and they will no longer be able to keep it. When this takes place, the bank will try to recoup their money by taking the property to auction and selling it to the highest bidder. At the time that the foreclosure occurs, it becomes a matter of public record and is searchable by anyone.
There are several different ways to find repo houses and, depending on how much time you want to put into it the research, it can get rather extensive. Most foreclosures are going to be listed in the local paper as it may be a requirement to do so. There are also some agencies which compile this information and you can go search through it manually at any time for new foreclosures that are taking place.
The easiest way of how to find repo houses, however, is to search for them on the Internet. Since the information is public knowledge, there are several websites that have compiled this information and made it searchable by county, state, city or zip code. This can help you to find the foreclosures whenever they first take place, and that can benefit you in your efforts to obtain the property greatly.
REO Properties for Sale - What's the Benefit?
REO Properties for Sale - What's the Benefit?
You are probably familiar with the foreclosure market to a certain extent and it is rather amazing, the number of individuals who are going through foreclosure at any given time. As a result of this condition, there are a multitude of foreclosure auctions that are taking place and not all of them are going to result in the successful sale of the property. Many times, far more is owed on the property than what the property is currently worth. After an unsuccessful auction, the bank takes possession of the property and it becomes a part of the REO properties for sale.
These REO properties, or bank repossessed properties are no longer available through a foreclosure auction. At this point, they are available through a real estate agent and the bank is interested in making sure that they recoup as much of their money from the lost loan as possible. Purchasing one of these REO properties for sale will be very similar to purchasing a home from a property owner, but there are a few things that you should be concerned about.
First of all, many of these REO properties have been sitting vacant for quite some time, and they may be in somewhat of a dilapidated condition. Most times, the lending institution is going to put a little bit of money into fixing up the home and getting it in a sellable condition. It is often a good idea, however, that you do your own inspection of any of these REO properties for sale in order to make sure that there is nothing hiding underneath the surface.
Although it certainly is possible for you to walk away with a bargain by choosing one of these REO properties for sale, it is usually a better idea for you to purchase a home in a foreclosed state, or perhaps even during pre-foreclosure. By finding these properties early, either by searching through public records or using an online resource, you have a better opportunity of making a successful and profitable purchase.
You are probably familiar with the foreclosure market to a certain extent and it is rather amazing, the number of individuals who are going through foreclosure at any given time. As a result of this condition, there are a multitude of foreclosure auctions that are taking place and not all of them are going to result in the successful sale of the property. Many times, far more is owed on the property than what the property is currently worth. After an unsuccessful auction, the bank takes possession of the property and it becomes a part of the REO properties for sale.
These REO properties, or bank repossessed properties are no longer available through a foreclosure auction. At this point, they are available through a real estate agent and the bank is interested in making sure that they recoup as much of their money from the lost loan as possible. Purchasing one of these REO properties for sale will be very similar to purchasing a home from a property owner, but there are a few things that you should be concerned about.
First of all, many of these REO properties have been sitting vacant for quite some time, and they may be in somewhat of a dilapidated condition. Most times, the lending institution is going to put a little bit of money into fixing up the home and getting it in a sellable condition. It is often a good idea, however, that you do your own inspection of any of these REO properties for sale in order to make sure that there is nothing hiding underneath the surface.
Although it certainly is possible for you to walk away with a bargain by choosing one of these REO properties for sale, it is usually a better idea for you to purchase a home in a foreclosed state, or perhaps even during pre-foreclosure. By finding these properties early, either by searching through public records or using an online resource, you have a better opportunity of making a successful and profitable purchase.
Rising Foreclosures: Is the Recession Really Over?
Rising Foreclosures: Is the Recession Really Over?
Intro - If you've been looking for yourself into whether or not this whole economic crisis is waning so that you can get on with planning for your finances to recover, you may have noticed that it's really difficult to get any sort of straight up answer about this topic at all.
We've been told repeatedly lately, on almost a monthly basis that the recession is over from some sources; while from other sources we're being told that the recession might last into next year. However, what we're often seeing is the result of reporters using the term "recession" rather loosely, or to mean different things.
The National Bureau of Economic Research defines a recession as a "significant decline in economic activity spread across the economy lasting more than a few months". They include in this economic activity not only gross domestic product but also employment, incomes/payrolls, industrial production, and sales. Some sources define a recession only by the GDP having two quarters in decline which encompasses a far looser definition.
By the NBER definition, we're currently in the worst repression since the Great Depression, though we are hopeful that things will turn around soon, it is probably too early to call it "over".
Looking at the status of jobs in the US at present is tricky. While the government is distributing stimulus dollars, they are not directly translated into new jobs or more spending. The unemployment rate is still climbing though not as steeply as in previous months with the problem of a low rate of hires compounding the issue. According to the Bureau of Labor Statistics the "non-farm payroll employment continued to decline in July" and as people continue to not find jobs, they become more discouraged and actually stop looking, believing that there just are no jobs out there to find.
When you consider the real estate market at present, it is true that on average home sales are rising, however, those rises are in particular markets and particular areas. Foreclosures are still up seven percent in July over June and government stimulus dollars has yet to assist many of the home owners who're unable to pay their mortgages.
In other areas that are affected by the recession, things mostly look pretty bleak; retail sales are still falling and the GDP is down one percent for Q2. However, it looks like the stock market has rallied, which I assume is the cause of so many reports of a concluded recession.
I think that the wise thing to do at this time is to take a look at all the factors contributing to our current recession together before jumping to the conclusion that it's over. Be wary of the motives behind any source claiming that the recession is over and proceed cautiously just in case.
Intro - If you've been looking for yourself into whether or not this whole economic crisis is waning so that you can get on with planning for your finances to recover, you may have noticed that it's really difficult to get any sort of straight up answer about this topic at all.
We've been told repeatedly lately, on almost a monthly basis that the recession is over from some sources; while from other sources we're being told that the recession might last into next year. However, what we're often seeing is the result of reporters using the term "recession" rather loosely, or to mean different things.
The National Bureau of Economic Research defines a recession as a "significant decline in economic activity spread across the economy lasting more than a few months". They include in this economic activity not only gross domestic product but also employment, incomes/payrolls, industrial production, and sales. Some sources define a recession only by the GDP having two quarters in decline which encompasses a far looser definition.
By the NBER definition, we're currently in the worst repression since the Great Depression, though we are hopeful that things will turn around soon, it is probably too early to call it "over".
Looking at the status of jobs in the US at present is tricky. While the government is distributing stimulus dollars, they are not directly translated into new jobs or more spending. The unemployment rate is still climbing though not as steeply as in previous months with the problem of a low rate of hires compounding the issue. According to the Bureau of Labor Statistics the "non-farm payroll employment continued to decline in July" and as people continue to not find jobs, they become more discouraged and actually stop looking, believing that there just are no jobs out there to find.
When you consider the real estate market at present, it is true that on average home sales are rising, however, those rises are in particular markets and particular areas. Foreclosures are still up seven percent in July over June and government stimulus dollars has yet to assist many of the home owners who're unable to pay their mortgages.
In other areas that are affected by the recession, things mostly look pretty bleak; retail sales are still falling and the GDP is down one percent for Q2. However, it looks like the stock market has rallied, which I assume is the cause of so many reports of a concluded recession.
I think that the wise thing to do at this time is to take a look at all the factors contributing to our current recession together before jumping to the conclusion that it's over. Be wary of the motives behind any source claiming that the recession is over and proceed cautiously just in case.
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