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, February 28, 2008

Housing pricing grows worse

The home prices decline is showing no sign of letting up and the amount of foreclosures continues to rise.

A closely-watched national index released yesterday indicates home prices fell 8.9 percent in 2007 -- the biggest price drop in the index's 20-year history.

The S&P/Case-Shiller U.S. National Home Price index indicates that in the New York region, which includes counties in New York State, Connecticut, New Jersey and Pennsylvania, home prices tumbled 5.6 percent year-over-year in 2007.

The quantity of homes facing foreclosure jumped 57 percent in January compared with a year ago. Lenders are increasingly forced to take possession of homes they can’t unload at auctions, said RealtyTrac.

Wednesday, February 27, 2008

government could purchase up to 1 million mortgages over a period of five years

Investors could sell up to $15 billion of troubled mortgages to the government under a plan major House members are discussing to bolster the U.S. housing market.

The mortgage plan would allow the government to purchase up to 1 million mortgages over five years in an effort to help struggling owners avoid foreclosure, and financial markets avoid more mortgage-related losses. The mortgage loans would be bought by the Federal Housing Administration, a Depression-era agency that insures loans made to borrowers with lower or bad credit.

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Tuesday, February 26, 2008

Home price dive accelerates

The 2007 year-end results are in and the info is bad: Major housing markets were plunging even more than anticipated.

The decline in residential real estate accelerated though the end of 2007, and property prices in 20 key markets went down 9.1% for the year, according to a survey released Tuesday.

The S&P Case/Shiller Home Price index showed its largest annual plunge in its 20-year history. By comparison, during the recession of 1990-1991, home prices only fell 2.8%.

Prices dropped faster throughout 2007 with the index recording a 9.1% year-over-year drop in December.

"Home prices across the nation and in most metro areas are significantly lower than where they were a year ago," said Robert Shiller, Chief Economist at MacroMarkets LLC.

All metro areas are now reporting at least four consecutive monthly drops.

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