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Fed sees signs of recovery

Fed sees signs of recovery
The Federal Reserve offered its most upbeat economic outlook in nearly a year at the conclusion of its regular two-day policy meeting recently. After emerging from the closed-door assembly, the Fed committee issued a statement that touted improvements in the labor market and business spending, but cautioned, recovery is likely to be moderate for a time." Taken directly, it may not sound like a rave review, but when you compare it to what Fed officials have been saying since last April-Economic activity is likely to remain weak for a time-it's certainly an improvement.Even with the rosier outlook, the Federal Reserve committee voted to keep the target range for its benchmark federal funds rate at 0 to 0.25 percent, and noted that "economic conditions...are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The decision to maintain the near-zero rate, though, was not unanimous - the first dissenting vote among Fed policymakers since January 2009, according to a CNN report. Thomas M. Hoenig, Kansas City Fed president, said economic conditions had improved enough to make exceptionally low rates "no longer warranted," according to the central bank's statement. Fed officials are holding to their plans of pulling back from the secondary market in the coming months. The committee confirmed that its program to purchase mortgage-backed securities (MBS) and debt from the GSEs will come to a close on March 31, as previously signaled. By that time, the Fed says it will have bought $1.25 trillion of MBS and about $175 billion of agency debt. The Federal Reserve has already begun to slow the pace of these purchases to help facilitate a smooth transition when the agency makes its exit.

Source: DSNews.com, Carrie Bay (01/27/2010)

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Housing starts decline, permits rise

Housing starts decline, permits rise

Nationwide housing production fell four percent in December to a seasonally adjusted annual rate of 557,000 units, according to data released today by the U.S. Commerce Department. Meanwhile, permit issuance, which can be a future sign of housing activity, rose 10.9 percent last month to a seasonally adjusted annual rate of 653,000 units. Single-family housing starts fell 6.9 percent in December to a seasonally adjusted annual rate of 456,000 while multifamily starts posted a 12.2 percent gain to a seasonally adjusted annual rate of 101,000 units.Single-family permits rose 8.3 percent to a seasonally adjusted annual rate of 508,000 units in December while multifamily permits were up 20.8 percent to 145,000 units. On an annual basis, year-end figures from the Commerce Department show that overall housing starts declined 38.8 percent to 554,000 units. Single-family starts were down 28.7 percent for the year to 444,000 units while multi-family starts declined 61.1 percent to 110,000 units." These figures give us the first estimate of the worst year we've seen for housing production since the Census began recording these numbers," said NAHB Chief Economist David Crowe. "We remain cautiously optimistic about a recovery in 2010, as job growth begins to show positive signs by mid-year." Regionally, housing starts in December were down 19 percent in the Northeast, 18.5 percent in the Midwest and 0.9 percent in the West. The South posted a 3.3 percent gain.

Short Sales don't relieve Deficiency Judgement

You lost your house – but you still have to pay?

As terrible as it is to lose your house to foreclosure, at least it's a relief to put your biggest financial headache behind you, right?

Former homeowners may still be on the hook if there's a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these "deficiency judgments" are ticking time bombs that can explode years after borrowers lose their homes.
It can even happen to people who got their bank to approve them selling their home for less than it is worth. Some banks issue 1099 for the difference and make home owners pay taxes on the short amount as well

Sad Examples are that
Mr. Jones does a Short Sale, His bank 2-4 years latter sends a letter demanding 1- Payment of short sale amount or them to claim Bankrupcy. This is the dark cloud that looms over the future Short Sales

Whether banks can and will pursue deficiency judgments depends on many factors, including what state the borrower lives in and whether there's a second mortgage or other liens. But if borrowers ignore the possibility of deficiencies, it could haunt them

Lenders may release property liens in order to facilitate short sales without releasing borrowers from their obligations to pay under the promissory notes. The secured debt can convert to an unsecured one after the sale

Releasing title does not necessarily end the debt. It's complicated because of variations in state law, but, generally, a mortgage has two parts: a pledge of collateral, represented by the home, and a promise to pay off the loan