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, October 17, 2008

U.S. construction lowest in 17 years

The market for housing construction continued its descent into hell in the United States, where housing starts have declined again in September, reaching their lowest level since January 1991.

Housing starts of dwellings fell by 6.3% in September compared to August, reaching 817 000 (annual rate), according to seasonally adjusted figures published by the U.S. Department of Commerce.

This decline, even more important that the figures in the previous months were revised downward (to 872 000 units, instead of 895, 000), embeds the forecasts of analysts, on average, which builds on a decline in index 870 000 units.

Building permits fell in September by 8.3% to 786 000 units (annual rate), their lowest level since November 1981, added the ministry.

This is much worse than what analysts predicted that table in a whole on a decline in the index 840 000 permits issued.

The figure of the previous month was revised up slightly, to permit 857 000 (instead of 854, 000).

Compared to September 2007, housing starts of dwellings fell by 31.1% and building permits by 38.4%, according to the ministry.

These figures are in line with the forecasts of the International Monetary Fund (IMF) or more officials of the U.S. Federal Reserve, which recently estimated that the housing market had not yet hit bottom.

The decline in both indicators, however, slowed its pace: the 6.3% decline in housing starts of dwellings in September following a decline of 8.5% in August and 12.9% in July. The 8.3% of building permits had been preceded by a decline of 8.1% in August and 17.9% in July.

The decline in housing starts in September was driven by a fall in new construction of houses by 12% compared to August.

Thursday, October 16, 2008

The infernal spiral resumes on the Stock Exchange

Fear appears to confirm its strong return on the stock markets, as evidenced by Thursday's second largest loss in the history of the Tokyo Stock Exchange.

Indeed, the Nikkei lost 11.41% to 8458.45 points at closing. Only the crash of 1987 was worse for the Japanese stock market, which had lost 14.9%.

The Shanghai Stock Exchange has also suffered significant losses at the end of the meeting, while the main index has cut 4.25% to 1909.94 points.

In Europe, the German DAX fell 2.69% to 4730.98 points around 6:06 pm New York. Meanwhile, London lost 3.14% to 3951.37 points and the CAC 40 lost 4% to 3245.87 points in Paris.

The renewed confidence that followed the adoption of plans to rescue the United States and Europe was fragile. Some brokers are not surprised by the decline in block Thursday.

"After the second largest drop in history on Wall Street, it is inevitable that Japanese shares plunge," said Hiroaki Hiwat, strategist at Toyo Securities. "The future will depend on the attitude of investors, if they fix their attention on the financial health of Japanese companies or on external factors," he predicted.

When its bad, its bad all over. I am starting to wonder when we will see a little sunshine in the world of mortgages. When the economy is so bad, who wants to invest in the future?