Kickstart to the US Property Market
Obama’s announcement this week of US$275 billion in funds to help mortgage holders has been widely proclaimed as a much-needed boost to the US housing market. The massive financial injection will be made up of US$50 billion from the US financial bailout, US$25 billion from the federal mortgage companies, Fannie Mae and Freddie Mac, plus US$200 billion from the US Treasury.
The availability of funds could not have happened at a better time. It is estimated that around 9% of US households with a mortgage are currently behind with their mortgage payments or already at the repossession (foreclosure) stage. According to Credit Suisse, this percentage could rise to 16% by 2012.
The current mortgage situation in the US is a direct consequence of the US subprime crisis and the property market deflation that immediately followed it. The worldwide effects of this are well known and few countries’ economies and property markets have remained immune. As President Obama pointed out when he presented the US$275 billion mortgage rescue, “All of us are paying a price for this home mortgage crisis.”
Under the rescue plan, those experiencing difficulties with keeping up with mortgage instalments have the opportunity to reduce their monthly payments to a level they can afford. Borrowers will receive up to US$1,000 a year for a maximum of five years to reduce their loan amount provided they keep up with their monthly payments.
The slowdown in the US property market has led to a significant decline in house values. Directly affected by this are 4 to 5 million mortgage holders whose loan-to-value ratio is now higher than it was when they first took out their mortgage.
“Apart from the massive injection of funds, the rescue plan will also bring some much-needed confidence to the US property market,” says James Gonzalez, Market Analyst at Obelisk Investment Property. “While we cannot expect the current situation to change overnight, I think it is realistic to look forward to a reversal of the fall in house prices.” James points out that once this happens, it will have knock-on effects in other countries with property markets in a similar situation.
For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).
Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at http://www.absoluteguideseries.com/
Email: info@obeliskinternational.com or visit our website: http://www.obeliskinvestmentproperty.com/
For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com
The availability of funds could not have happened at a better time. It is estimated that around 9% of US households with a mortgage are currently behind with their mortgage payments or already at the repossession (foreclosure) stage. According to Credit Suisse, this percentage could rise to 16% by 2012.
The current mortgage situation in the US is a direct consequence of the US subprime crisis and the property market deflation that immediately followed it. The worldwide effects of this are well known and few countries’ economies and property markets have remained immune. As President Obama pointed out when he presented the US$275 billion mortgage rescue, “All of us are paying a price for this home mortgage crisis.”
Under the rescue plan, those experiencing difficulties with keeping up with mortgage instalments have the opportunity to reduce their monthly payments to a level they can afford. Borrowers will receive up to US$1,000 a year for a maximum of five years to reduce their loan amount provided they keep up with their monthly payments.
The slowdown in the US property market has led to a significant decline in house values. Directly affected by this are 4 to 5 million mortgage holders whose loan-to-value ratio is now higher than it was when they first took out their mortgage.
“Apart from the massive injection of funds, the rescue plan will also bring some much-needed confidence to the US property market,” says James Gonzalez, Market Analyst at Obelisk Investment Property. “While we cannot expect the current situation to change overnight, I think it is realistic to look forward to a reversal of the fall in house prices.” James points out that once this happens, it will have knock-on effects in other countries with property markets in a similar situation.
For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).
Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at http://www.absoluteguideseries.com/
Email: info@obeliskinternational.com or visit our website: http://www.obeliskinvestmentproperty.com/
For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com
Labels: economy, finance, investment, mortgage, property, US
posted by Alison Kane at 2:53 pm
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