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.

Friday, February 8, 2008

Credit market: As if there was no Real Estate

Even if the commercial real estate market has held up pretty well so far, even if businesses are not walking away from their leases, even if the U.S. office vacancy rate at the end of 2007 was 12.4%, slightly below the level of 2006, and even if the rate for industrial properties was flat at around 8%...

The credit markets are performing as if the Judgment Day has arrived for offices, warehouses and retail. The credit depression that originated in the housing market has invaded the world of commercial real estate.

Despite the small volume of defaults, the dipping market value of CMBS has forced a lot of write downs. Wachovia took $1.1 billion in write downs over the last two quarters and ended the year with approximately $7.5 billion in its trading account. It transferred most of those securities into a long-term investment portfolio where accounting rules don't require the bank to mark its holdings to market. Do you deduce it's worried about something?

Thursday, February 7, 2008

Homeowners do not believe in recession

75% of homeowners estimate their home has gained or retained its value.

Even if reports show home values going into an historic decline, more than 75% believe their own home has not lost value in the past year, according to an internet survey., a Web site that gives estimated home values, had the survey done by Harris Interactive.

Out of 1,619 surveyed, 36% homeowners believe their home has increased in value, and another 41% believe the value of their home has stayed the same.

Zillow's own estimates are that the value of homes has declined 5% on average last year, with many markets hit with much steeper declines.

Wal-Mart's sales growth is down

U.S. retailers will probably report their slowest monthly sales growth in five years, which would further reinforce fears that American consumers are slowing down under the weight of a sluggish economy.

The world’s leader, Wal-Mart Stores Inc., reported a big slowdown in its January same-store sales, or sales at stores open for at least a year.

Wal-Mart partly blamed its slower sales on poor gift card redemptions, but not everyone believes that explanation.

Ken Perkins of the firm Retail Metrics: "Wal-Mart's not a top destination for gift card redemptions. I think its results show that its core low-income shoppers and now the middle-class households who shop there are scaling back."

Odds of a Recession near 50%

Economists in the Wall Street Journal forecasting survey gave Federal Reserve Chairman Ben Bernanke the lowest grade: 75%. They commented that it is increasingly likely the U.S. economy will tumble into a recession.

Inflation Expectations Remain Unchanged.
On average, the survey's 52 respondents put the odds of a recession at 49%, way up from 40%

Wednesday, February 6, 2008

Will jumbo rates go higher?

Could jumbo rates go up? Reverse mortgage information, and a possible vote today
What will happen to the jumbo market above $750k if the new loan limits go into effect? Many believe that pricing will get even worse! After all, the ...

Productivity and Recession

Productivity Slowed in 4th Quarter
U.S. productivity decelerated at the end of 2007 along with the economy, yet its 1.8% climb was much higher than expected, while unit labor costs went...

Recession Fears Intensify
Service-sector activity in January fell to its lowest level since 2001, suggesting businesses from hotels and retailers to banks are now contracting. ...