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, October 2, 2008

Real estate crisis: falling prices are still falling

Las Vegas is at the top of the list (or should I say at the bottom), with a fall on a year of 30%.

The price of residential properties in 20 U.S. cities fell in July with a record pace, signaling the worst real estate recession in recent decades, even before hitting the credit crisis of September.

The index of U.S. home prices S & P / Case-Shiller has lost 16.3% last year, more than forecast after a decline of 15.9% in June. According to Bloomberg, the index plunged every month since January 2007.

The fall of real estate prices is at the center of the crisis on financial markets, while demand declines and leads to lower property values and thus an increase in the number of property seizures.

Banks will probably continue to tighten credit conditions in the coming months in order to limit losses, which suggests that the housing sector will continue to fall and consumer spending continue to decline, reports Bloomberg.

"The fact that house prices accelerated its slide before the worst of the credit crunch hits this month is a bad omen," said Scotia Capital economist Derek Holt.

House prices fell by 0.9% in July from the previous month, after losing 0.5% in June, according to a report. Prices have experienced a decline in 13 cities, compared to 11 cities in June.

The 20 regions showed a drop in prices in July compared to the previous year. Las Vegas is at the top of the list, with a fall on a year of 30%. Phoenix follows with a loss of 29%. The home crisis is far from over!

Monday, September 29, 2008

Injection of liquidity: Intervention by the Federal Reserve and other central banks

The U.S. Federal Reserve announced today new measures, together with other central banks including the European Central Bank (ECB), to address the financial crisis.

According to the Fed, these measures are designed to "significantly increase" the cash available to financial institutions and banks. The U.S. Federal Reserve did not provide figures but says the ECB have made available with the Fed at least $ 240 billion.

The Federal Reserve cited "ongoing tensions" on the need for short-term financing. In New York, the stock market opened today down 3%. The Dow Jones core values fell by 333.88 points to 10809.25 points.

These measures are happening while European states come to the rescue of their banks. The giant Belgian-Dutch banking and insurance Fortis said it was confident (today) after the rescue plan was announced the previous day by the three governments of Benelux (Belgium, Netherlands, Luxembourg), who decided to inject 11, 2 billion euros to prevent the establishment of being sunken by the financial crisis.