If the us in financial trouble because of the housing problem why not lower mortgage rates on home l

What financial trouble?

If the us in financial trouble because of the housing problem why not lower mortgage rates on home loans????

Because the government/banks dont make a multi million profit - this effecting the economy. I guess!

If the us in financial trouble because of the housing problem why not lower mortgage rates on home loans????

You have to balance the economy with inflation. If you lower the interest rate to much or to fast you will cause inflation.

If the us in financial trouble because of the housing problem why not lower mortgage rates on home loans????

The financial situation of a country is as much depending on perception, as on reality. Still running high on the enormous success of the 90%26#039;s, most people haven%26#039;t realized, the USA is in trouble. But visit another country. There, the sentiment has already changed from admiration to feeling pity for the USA, like a guy, who is still wearing his Gucci%26#039;s, but can%26#039;t pay the bill for his kids health care.

If the us in financial trouble because of the housing problem why not lower mortgage rates on home loans????

Actually, The US is in financial trouble not because of high mortgage rates nor loans. Most of the Loan entities are privately owned. We could call it financial trouble due to over expenses that surpass planned budgets.

Now, On the home loan situation. The problem resides in there was a combination of over construction due to Banks or Mortgage Companies were offering %26quot;eccentric%26quot; loans (IE. interest first loans) and people opted to buy more than needed and with excessive pricing, at the beginning everything was going great. Now 4 to five years later, when the real deal came up, a lot of people could not afford payments. This made a devastating combination of over construction plus pre-owned. Making the market to be saturated of housing. the end result is. More houses in the market than required. And you know what happens when there%26#039;s more product than buyers (offer-demand). Everything tends to slow down and drop in prices. That%26#039;s why you see more houses in the market that cannot be sold as quick as they did two years ago.

I hope this helps a bit.............

If the us in financial trouble because of the housing problem why not lower mortgage rates on home loans????

The housing problem has less to do with rates than it does with declining home values. Many homes have lost value in the past year by as much as 20% or more. This has caused a negative equity in some cases or the home is worth less than the amount financed.

In addition many people went into adjustable rate loans at high loan to values and those loan rates are adjusting now. With the reduced values of the homes these people are having trouble selling or refinancing because they are upside down. Their only option is to pay the adjusted rate, try to get a short sale and get out of their property, be foreclosed on, try mortgage mitigation, or possibly bankruptcy.

Incidentally rates in general are VERY low right now on mortgages so it has nothing to do with that.

If the us in financial trouble because of the housing problem why not lower mortgage rates on home loans????

I dispute the whole premise that there%26#039;s some sort of %26quot;crisis%26quot;.

What%26#039;s going on, is that home prices are down.

The primary function of homes, IS FOR PEOPLE TO LIVE IN, not for real estate investors to %26quot;flip%26quot; and make a quick profit.

That is why the prices when up so drastically, keeping many people (like myself) from being able to buy a home, just to live in!

So in my opinion, the market isn%26#039;t bad, IT%26#039;S GREAT, because more people will be able to afford homes, which is the main reason homes exist!

This scenario isn%26#039;t bad for the economy overall, just bad for those who make their money off the unnatural inflated house prices we%26#039;ve had for the last few years.

If the us in financial trouble because of the housing problem why not lower mortgage rates on home loans????

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