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.

Tuesday, December 30, 2008

Record fall in house prices in the U.S.

Housing prices in the United States have registered a new record fall in October, falling 18% on a year, according to the S & P / Case-Shiller measuring prices in the 20 largest U.S. cities and published Tuesday.

The price index in the 10 largest cities in the country has also recorded an unprecedented decline, from 19.1% over a year.

In monthly slide, the monthly prices fell by 2.2% in 20 major cities in October, while they fell by 1.8% in September compared to August.

In the ten largest cities, prices fell by 2.1% in October compared to September, against a decrease of 1.9% a month earlier.

Compared with the peak in mid-2006, housing prices are down 23.4% for the 20 largest cities and 25.0% for the ten most important.

Monday, December 29, 2008

Wall Street will be healing its wounds in 2009

Bloodless end to a nightmare year that saw it erase more than five years of ascension, the New York Stock Exchange will soon touch 2009, by hoping it has hit bottom, but without illusion when facing an economic crisis which will be deep and prolonged.

"I would like to pretend it never happened!" Says Gina Martin, an analyst at Wachovia Securities.

However, just a few days before the end of 2008, the flagship index of Wall Street, the Dow Jones, was down 36% since the beginning of the year. At the bottom, on 21 November it had lost 47% from its all-time high reached a year earlier, in October 2007.

The Nasdaq, mainly for technology, has lost 42% and the S & P 500 41% since January 1st 2008.

The Dow Jones suffered its worst year since 1931. No wonder, for Gina Martin, since the market has faced "the greatest financial crisis in the United States since the Great Depression” of the 1930s.

Bleeding is global and affects the World economy

According to Lewis Alexander, chief economist at Citigroup, stock markets around the world have shrunk by about 25,000 billion dollars, which represents 40% of global gross domestic product.

"It's as bad as a market can be, in all forms and all ways: destruction of jobs, devastated economies, carnage on the stock market and real estate," said Art Hogan, head of market strategy at Jefferies.

The market has also started to count its victims, first with the smallest investment bank Bear Stearns in March, before his big sisters do the same in the fall: Lehman Brothers and Merrill Lynch, and big financial institutions in mortgage refinancing Fannie Mae and Freddie Mac.

In early October, it’s the collapse: the Dow Jones falls by 22% in ten days. The extreme volatility is a sign of the nervousness of investors.

Forfeited its stars, its former stars have lost some 90% of their value, Wall Street returned to its level of 2002-2003.

According to Art Hogan: “In view of the cataclysm of 2008, the feeling is that next year will necessarily be better".

Sam Stovall, of Standard and Poor's, believes in a recovery in 2009 after the massive waves of sales observed. "There's a good chance to see a recovery next year, but certainly in a limited range,” says the analyst.

Sam Stovall expects the S & P 500 to be 1025 points at the end of next year, against 870 points today. The bank Credit Suisse predicts 1050 points, an increase of 20% from its current level. But very few really want to throw or give a prognosis.

"Making predictions about the level of shares at the end of 2009 is almost impossible. They are far from normal market conditions,"says Gina Martin.

For this analyst for Wachovia Securities, who expects no recovery for the U.S. economy into recession before the second half of 2009, the first three to six months of the year will look like the end of 2008.

Specialists of the market, hoping that it has found a strong enough floor, are also waiting see the effects of the government plans.

"The markets will take all the signs of revival of the economy to try to get ahead," said Gregori Volokhine of Meeschaert New York.

But some are skeptical about this new picture offered by Wall Street, a now dented icon of free enterprise.

"The shares are cheap when they are valued in the context of an economy based on finance and formerly dominated by debt, cheap financing and even tax rate on small companies," says William Gross, Executive Director of the Investment Funds Pimco (Allianz Group).

"This world, however, belongs to our past, not our future," he adds.