Mortgage, loan and property. What is a mortgage?


A mortgage is putting a property as a guarantee to a lender as a security for a mortgage loan.

While a mortgage in itself is not a liability or a dept, it is evidence of a debt. It is a transfer of an interest in property, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the property when the terms of the mortgage have been satisfied or concluded.

In other words, the mortgage is a guarantee for the loan that the lender makes to the borrower. In all but a very few states, a mortgage creates a lien on the title to the mortgaged property.

Thursday, August 6, 2009

U.S.: further increase of the promises of housing sales

The promises of housing sales in the United States rose in June for the fifth consecutive month, according to figures released Tuesday by the National Association of Realtors (NAR).

In seasonally adjusted, the index measuring these promises sales grew by 3.6%, while analysts expect a rise of 0.3% only. In one year, the increase is 6.7%. And this is the first time since 2003, when the housing market began a dramatic growth which led to the crisis, the index advancing for five consecutive months.

"The historically low interest rates on mortgages, affordability and wide range encourage buyers who were waiting," noted the chief economist of NAR, Lawrence Yun, stressing however that the activity was concentrated on "cheap housing".

The President of the NAR, Charles McMillan, adding that this trend should be confirmed by a lower rate of cancellations of sales, "which had come up recently."

The home crisis is not over, but it looks better.

Friday, July 17, 2009

Surprise increase in construction in the United States

Coming back from vacation, and going back on vacation, but in the mean time... I am happy to tell you that construction of new homes reached a peak of seven months in the United States in June, a sign that builders are beginning to regain confidence.

The Commerce Department said Friday that housing starts jumped 3.6% last month. This gives a total of 582 000 units according to the figures, which exclude seasonal variations. It is a leap of 14% in construction of single family homes, which explains the increase.

The data is more interesting than the analysts' forecasts, which projected 530 000 units, and the low of 479 000 reached in April.

Another encouraging sign is in applications for building permits, an indicator of future activity. They rose 8.7% in June, giving an annual rate of 563 000 units. Economists consulted by Thomson Reuters were expecting 520 000.

Figures on Friday are very interesting because during the last three years, the real estate market simply crashed, crashed, and crashed again. Collapse or recovery has a significant impact on the rest of the economy.

However, analysts prefer to wait before predicting that real estate really restarted because the United States economy lost more jobs and because house prices are still declining. Also, seizures and stockpiles of unsold homes are still high.

The National Association of Home Builders said Thursday that its market index rose two points to 17 in July, the highest level for about a year. Any figure under 50 indicates a negative feeling. Beyond 50, the feeling is positive. The last time the index rose was in April 2006.

Friday, July 3, 2009

U.S. unemployment rises to 9.5%

The destruction of jobs has accelerated sharply in the United States, where 467,000 jobs were lost in June, raising the unemployment rate to 9.5%, according to figures adjusted seasonally published Thursday by the U.S. Department of Labor.

This net increase in redundancies, after two months of decline, is stronger than analysts predicted, which projected 365,000 jobs destroyed for the month of June.

Rising unemployment is however slightly lower than their expectations (9.6%).

Revisions cumulated figures of the Ministry for the last two months is minimal.

Since the beginning of the recession in December 2007, job losses have reached 6.5 million and the unemployment rate increased 4.6 percentage points, "wrote the Ministry to recall the extent of the crisis.

The destruction of jobs have affected all sectors of the economy, with the exception of the education sector and health services, and the "other services" (essentially the dye), which created a total 43,000 jobs.

The number of jobs has sacrificed more than doubled in the services sector, employing more than 85% of the workforce non-farm, to reach 244,000.

It increased by more than 8% in the industry, affected more than two years.

Ministry figures come a week after the Monetary Policy Committee of the U.S. central bank (Fed) had warned that the economy was far from out of trouble despite signs of stabilization and it shows prospect of a recovery in the second half.

The number of unemployed in the United States reached 14.7 million, according to the official ministry. He has more than doubled since the start of the recession.

In addition, nearly 6.4 million people claiming a desire to find a job but not counted in the labor force for various reasons.

The number of long-term unemployed (27 weeks or more) continues to increase and reached 4.4 million.

According to the ministry, nine million people are forced to work part-time option because of economic conditions.

Monday, June 22, 2009

Interest Rate: The Fed wants to calm fears

The leaders of the U.S. Federal Reserve (Fed) are studying the possibility of using the policy statement Wednesday to stop any speculation that they are willing to raise interest rates this year.

Policy makers at the Fed have already indicated their acceptance of increased rates of return on Treasury bonds over the long term, but some fear the odds on a premature rise in interest rates.

In addition, the staff of the Fed focused on the decision of the Bank of Canada to waive any increase in rates until 2010, according to a person aware of this issue, without having come to the conclusion that the ad was effective.

For example, on 21 April, the Bank of Canada reduced its key rate to 0.25%, the lowest in its history, stating that "we can expect the target rate for loans of one day remains at its current level until the end of the second quarter of 2010, the situation is subject to the outlook for inflation."

For the Fed, an option might be to focus in his statement on Wednesday that the more marked slowdown in the labor market and manufacturing activity in the United States will keep inflation low and temper the recovery, said Michael Feroli, economist at JPMorgan Chase in New York and former member of the Fed.

What is at stake is to keep borrowing costs low enough to promote a sustained recovery without linking the U.S. to a single action plan.

"There are ways (for decision by the Fed) to highlight their expectations for lower interest rates without committing too much," says Lou Crandall, chief economist at Wrightson ICAP, Jersey City, New Jersey.

The Fed chairman, Ben S. Bernanke and his colleagues of the Federal Open Market (FOMC) will meet in Washington tomorrow and Wednesday. Economists forecast that they will leave the rate by the Fed in a range from 0 to 0.25%. Policymakers will also discuss any changes to their commitment to purchase up to 300 billion U.S. Treasury bills and 1450 billion U.S. in debt related to real estate.

In its last two statements, the FOMC said that economic conditions are likely to justify the exceptionally low rate of federal funds for a long time. "

The markets have already indicated that they no longer take account of this speech. Treasury bills of two years have slipped since a report by the U.S. government reported on 5 June, the smallest loss of jobs in eight months, the rate of return of 1.14 is good % early yesterday afternoon in New York, compared to 0.91% in early June.

Futures contracts on the U.S. federal funds for March show a yield of 0.705%, which indicates a certain probability of rate hikes by the first quarter of 2010.

If job losses are declining, officials from the Fed, however, have often repeated that the unemployment rate will likely increase in coming months.

Friday, June 12, 2009

U.S. consumers still confident

The index of U.S. consumer confidence measured by the University of Michigan rose in June for the fourth month in succession, but a little less than expected by analysts, according to a preliminary estimate published Friday.

The index stood at 69.0 points against 67.8 points in May. Analysts were waiting to 69.5 points.

It is at its highest level since the low peak since the financial crisis of autumn (70.3 points in September 2008).

The final figures for the month of June will be released on June 26.

More to come later...

Wednesday, June 3, 2009

Home buyer promises surge in April

The promises of purchasing a house in the United States surged in April, posting their third consecutive month of rising and rising well beyond expectations, according to figures released Tuesday by the National Association of Realtors (NAR).

The index increased by 6.7% compared to March, having already taken 3.2% the previous month and 2.0% in February, according to a news release.

Analysts projected a rise of only 0.5%.

Compared with April 2008, the index recorded an increase of 3.2%.

In January, the promises of purchasing a home had plummeted to their lowest level since the NAR calculates it since 2001.

"The implementation of a tax credit of 8,000 dollars for first-time buyers is starting to take effect on the market," said NAR economist, Lawrence Yun, cited in a statement.

"Since buyers must complete their purchase before November 30 to qualify for this credit, we anticipate an increasing activity in the coming months," he added.

If the market "seems to have already reached its lowest and begin its rebound in some regions," some other areas are stagnant or decline, however, tempers Mr. Yun.

The cost of housing (taking into account prices, interest rates and the purchasing power of households), calculated since 1970, increased by 1.7% in April, said the association.

Thursday, May 28, 2009

Record fall in housing prices in the United States

The fall in home prices in the United States has set a new record in the first quarter, reaching 19.1% year on year, according to the Standard and Poor's / Case-Shiller released Tuesday, which measures domestic prices.

Compared to fourth quarter 2008, the drop was 7.5%. During this quarter it was 7.4% compared to the third quarter of 2008.

In the twenty largest cities of the country, the decline was also a record first quarter, reaching 18.7% in one year, and in the ten largest vities, 18.6%, said Standard and Poor's.

The drop in residential real estate market has continued at a steady pace since March, said one of the authors of the study.